Greek MPs pass new spending cuts, tax hikes

Written by on May 23, 2016 in Europe - Comments Off on Greek MPs pass new spending cuts, tax hikes
Photo: Hellenic Parliament/ Aliki Eleftheriou

Greek lawmakers on Sunday approved fresh spending cuts and tax hikes demanded by European creditors in exchange for a new installment of desperately needed bailout funds.

The legislation, which also provides a mechanism to slash spending in case of future budget overruns, comes two days ahead of a key meeting of eurozone finance ministers set to assess Athens’ compliance with bailout terms reached last year.

A positive assessment is key to European creditors easing the servicing terms for $225 billion in bailout loans given the country since 2010.

As parliament moved Sunday to adopt the new measures, thousands of protesters demonstrated in central Athens against the legislation.

The labor-backed protests have become a regular occurrence, with protesters insisting the reforms are unfairly penalizing workers, as ruling leftists work to satisfy EU reform demands and stave off what most analysts say would be a catastrophic financial collapse.

Last week, lawmakers approved a controversial package of pensions and tax reforms also demanded by creditors.  Those measures, also opposed by organized labor, reduce Greece’s highest pension payouts, while increasing contributions from those in medium and high income brackets.

In July 2015, Prime Minister Alexis Tsipras reluctantly accepted lender terms for a third European bailout package worth nearly $100 billion.

At that time, he told the Greek public the deal with the European Union and the International Monetary Fund was the only way to prevent the total collapse of the Greek economy and the country’s exit from the eurozone — the 19-nation grouping that uses the euro currency.


(Photo: Hellenic Parliament/ Aliki Eleftheriou)



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