Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

No strategy and a beige suit

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014

Read more

ENCORE!

Alain Choquette: A Hilarious Magician in Paris

Read more

FOCUS

France welcomes Iraqi Christian refugees

Read more

FRANCE IN FOCUS

Emmanuel Macron: A new economy minister with a pro-business agenda

Read more

THE OBSERVERS

More of this year's best Observers stories

Read more

#TECH 24

Changing the world, one video game at a time

Read more

IN THE PAPERS

Socialist Party summer conference kicks off in explosive atmosphere

Read more

  • Exclusive: Fabius warns of further sanctions against Russia

    Read more

  • Experimental Ebola drug ‘ZMapp’ heals all monkeys in study

    Read more

  • British killer escapes from French psychiatric hospital

    Read more

  • Ukraine to relaunch NATO membership bid

    Read more

  • Police hunt for British boy with brain tumour taken to France

    Read more

  • Chelsea’s Torres set for AC Milan switch

    Read more

  • France shines in IMF list of world’s promising economists

    Read more

  • Mapping Ukraine: Canada and Russia in ‘tweet for tat’ row

    Read more

  • First case of Ebola confirmed in Senegal

    Read more

  • Obama has 'no strategy yet' on potential Syria strikes

    Read more

  • Netflix to woo French with ‘House of Cards’ set in Marseille

    Read more

  • French businesses ‘hoping for a new Thatcher’

    Read more

  • Syrian refugees surpass 3 million, UN says

    Read more

  • West backs Ukrainian claims of Russian incursion

    Read more

  • Libyan PM resigns as Islamists set up rival administration

    Read more

  • UN says 43 peacekeepers captured in Golan Heights

    Read more

  • The deleted tweets of Manuel Valls

    Read more

  • Peru seizes record 6.5 tonnes of Europe-bound cocaine

    Read more

  • Pakistan army to mediate between PM, protesters

    Read more

  • In pictures: Billions of locusts invade Madagascan capital

    Read more

Europe

Greek cabinet passes austerity budget

Text by News Wires

Latest update : 2011-06-23

The Greek government approved Wednesday an austerity plan which includes a major privatisation programme aimed at raising 50 billion euros. The budget is a key condition for further EU-IMF help to tame the country’s massive public debt.

AFP - The Greek cabinet approved Wednesday a 2012-2015 austerity budget plan as well as laws for its implementation, a key condition for further EU-IMF help to tame a massive public debt, government sources said.

The government had committed to another round of stiff budget cuts and tax hikes in return for fresh EU-IMF cash and a new debt rescue deal.

The austerity measures will add up to more than 28 billion euros by 2015 and include a major privatisation programme to raise 50 billion euros -- a provision bitterly opposed by the unions who plan a 48-hour general strike in protest.

The government won the confidence motion by 155 votes to 143 but Prime Minister George Papandreou now faces a fraught challenge to overcome dissent within his Socialist party over the debt-cutting onslaught.

Papandreou attends an EU summit Thursday and Friday in Brussels where the Greek debt crisis is very high on the agenda.

His eurozone peers will be very anxious to know if he can get the latest steps through parliament after the close confidence vote.

Eurozone ministers have insisted on the latest measures before they would release the next tranche of debt funding worth 12 billion euros ($17 billion), part of a 110-billion-euro rescue package agreed with the European Union and International Monetary Fund last year.

The money will be used to cover debt repayments coming due next month and give Greece and its partners time to work on the next step -- a new rescue plan to keep Greece solvent for long enough so that it can grow its way back to fiscal balance.

The Greek finance minister will meet officials from the EU, IMF and European Central Bank in Athens Thursday to review the implementation of the new measures, the ministry said.

Parliament's vote on the legislation promises to be dramatic, with the financial markets watching the outcome closely given fears that a Greek default could hit other weaker eurozone members or even sink the euro entirely.

In Washington, US Federal Reserve chief Ben Bernanke warned that the Greek debt crisis could threaten the stability of the global financial system, not just the eurozone.

"If there were a failure to resolve that situation, it would pose threats to the European financial systems, the global financial system and to European political unity," he told a press conference.

Bernanke stressed that the Fed is not part of the negotiations to resolve the crisis, but has been "kept well-informed," citing a conference call over the weekend with the G7 (Group of Seven) rich countries on the issue.

During the Greek parliamentary debate leading up to the confidence vote in the early hours, Papandreou called for support "to avoid bankruptcy and keep Greece in the euro core."

The most immediate concerns are over Ireland and Portugal, bailed out by the EU and IMF like Greece, while Spain, or even Italy and Belgium, are considered potentially at risk of being dragged down should Athens go bust.

"We have a unique opportunity (to change the country).... If we falter, if we lose heart and squander it... history will judge us very harshly," Papandreou said early Wednesday.

The union in the electricity operator PPC, which opposes the sale of a 17-percent stake in the company under the privatisation plan, on Monday temporarily cut power at the infrastructure ministry.

It also began hour-long electricity cuts around the country, intending to escalate them when the reforms are being debated.

"In the end, the decision on this matter will be decisive for the future of aid payments to Greece, not (the) vote of confidence," analysts at Germany's Commerzbank commented.

"(Socialist) members who were afraid of an early election... will not necessarily vote in favour of the government’s fiscal policy," they wrote.

 

Date created : 2011-06-23

  • GREECE

    Government wins confidence vote in parliament

    Read more

  • GREECE

    Greek government faces crucial vote of confidence

    Read more

  • GREECE

    Eurozone delays decision on emergency loans to Greece

    Read more

COMMENT(S)