ATHENS, Greece – Greece’s coalition government led by interim prime minister Lucas Papademos has reached a tentative deal on the terms that will unlock a 130 billion euro bailout deal. The deal would prevent the southern European country from defaulting on its debt though one issue revolving around pension cuts is still at stake.
“There has been agreement on all issues except one,” Papademos’ office said in a statement.
The marathon talks lasted until early Thursday morning between the technocrat government and the three leaders of the country’s main parties. The draconian reforms are revolving around cost cutting plans, including a 22% reduction in the minimum wage, but the sticky point remains the supplementary pensions.
Under the new agreement, the Troika – the European Central Bank, the International Monetary Fund and the European Union – is imposing Greece to cut 300 million euros to the country’s pension system. All Greek parties are determined to avoid further cuts to pensioners, reports The Guardian, but officials are confident that all difficulties will be overcome.
The talks, viewed by many as Greece’s last chance to avoid a disorderly default, have already gone past the deadline set by European authorities. Anthonis Samaras, leader of the New Democracy party leader, said the negotiations would continue but he also said that he would oppose any measures that would hamper Greece’s economy.
Another leader of one the parties of Greece’s coalition government, George Karatzaferis of the Popular Orthodox Rally, or L.A.O.S., issued a statement at 1am arguing he would not agree with the terms of the deal. Mr. Karatzaferis’ party only holds 16 seats in the country’s Parliament and a deal would not be at risk if he decides to not back the new austerity package.
The leaders, reports The New York Times, seem to have agreed to a 22% reduction of the country’s minimum wage, which is around $775 a month. The wage cut would affect both private and public sector workers. Athens faces a €14.5bn bond repayment in six weeks’ time and stretching the talks on its latest austerity package is making European officials fear that Greece could default without a second debt deal in less than a year.
One Response to “Greece inches closer to debt deal”
Trackbacks/Pingbacks
[...] Greece – As riots were spreading across Greece’s capital, on Sunday the Greek Parliament approved painful austerity measures and wage cuts in order to prevent the country form defaulting on its debt. The package was voted by [...]