Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Europe's Desperate Seas: Migrant Deaths Crossing Mediterranean Top 3,000 in 2014

Read more

ENCORE!

'All is Well' for Lisa Simone

Read more

BUSINESS DAILY

EU questions Apple's tax deals in Ireland

Read more

FOCUS

The Iraqi TV show where victims confront terrorists

Read more

REPORTERS

Video: Syrian student risks her life to film IS group stronghold

Read more

LIFESTYLES

Forgotten and fictional sports

Read more

DEBATE

Modi in America: India's Prime minister on triumphant US tour

Read more

DEBATE

Hong Kong protests: Pro-democracy movement gets global support

Read more

MEDIAWATCH

China censors Hong Kong protests on social media

Read more

Europe

Greece seeks to ease bailout conditions

Text by News Wires

Latest update : 2012-06-23

A policy statement issued by Greece’s new coalition government shows that Athens will seek to ease the terms of its 130 billion euro bailout by renegotiating and delaying key austerity measures.

REUTERS - Greece wants tax cuts, extra help for the poor and unemployed, a freeze on public sector lay-offs and more time to cut its deficit under a plan likely to run into strong opposition at a European Union summit next week.

The new coalition government’s programme, seen by Reuters on Saturday, reflected public pressure to ease the terms of a 130 billion euro ($163 billion) bailout saving Greece from bankruptcy but only at the cost of harsh economic suffering.

If implemented in full, the new programme would undo many austerity measures the country agreed in February to clinch the bailout package, its second since 2010.

Euro zone partners have offered adjustments but no radical rewrite of the bailout conditions, with paymaster Germany particularly resistant to Greek calls for leniency.

Greece’s programme includes a call for the recapitalisation of the country’s fifth-largest lender, ATEbank - a state-owned agricultural bank that EU sources said this month was among several lenders the European Commission wanted to be wound down. The finance ministry has denied that report.

The programme, agreed by leaders of the three-party coalition after a June 17 election, faces its first test at a two-day EU summit starting next Thursday and sure to be dominated by the debt crisis that started in Greece and is now threatening to engulf Italy and Spain, the euro zone’s third and fourth-largest economies, respectively.

Inspectors from Greece’s “troika” of lenders - the EU, European Central Bank and International Monetary Fund - were due in Athens on Monday to review the country’s progress.

Euro zone officials have said the bailout package should be revised only to reflect time lost on two elections since early May and a deeper than expected recession.

“The general target is for there to be no further reductions in wages or pensions and no more taxes,” the Greek government programme said.

Uneasy allies

It called for a cut in the 23-percent value-added tax (sales tax) rate for restaurants and farmers, a freeze on lay-offs in the bloated public sector and for unemployment benefit to be paid for two years rather than one.

The government will also ask for two more years, until 2016, to cut its budget deficit to 2.1 percent of national economic output from 9.3 percent in 2011, an extension that would require extra foreign funding.

The lowest income tax threshold should be raised, the document said, and the minimum wage - cut by 22 percent in February - revised in line with agreements between employers and workers.

The programme also calls for the accelerated payment of 6 billion euros of government debt to suppliers.

The coalition brings together the conservative New Democracy, Socialist PASOK and Democratic Left in an alliance that will face constant pressure from an opposition led by the radical leftist Syriza bloc.

Led by charismatic ex-communist Alexis Tsipras, Syriza surged into second place in the election on a vow to tear up the terms of the bailout.

Conservative Prime Minister Antonis Samaras, a Harvard-educated economist who switched from opposing the first bailout to reluctantly supporting the second, has promised to soften the terms without jeopardising Greece’s place in the euro zone.

“Though the troika will be in Athens on Monday, the crunch test will be Thursday’s EU summit,” the centre-left Ethnos daily wrote in an editorial on Saturday.
($1 = 0.7977 euro)

 

Date created : 2012-06-23

  • GREECE

    New Greek government unveils cabinet

    Read more

  • GREECE

    Greek conservative leader Samaras sworn in as PM

    Read more

  • Greece

    Greece pro-bailout parties hold urgent coalition talks

    Read more

COMMENT(S)