Greece set to pass more cuts ahead of Eurogroup

The government is expected to submit to Parliament on Friday a bill detailing how it will cut another 325 million euros of spending to assuage eurozone finance ministers ahead of a Eurogroup meeting on Monday that could result in a final decision on whether Greece should receive a new bailout.

The government had to find the extra savings after New Democracy’s Antonis Samaras and PASOK’s George Papandreou objected last week to cuts to supplementary and basic pensions respectively.

However, these pensions will be trimmed further as part of the spending reductions that the eurozone and the International Monetary Fund has demanded.

Main pensions in excess of 1,300 euros per month will suffer a 10-12 percent cut, saving the state about 45 million euros.

On top of the 200-million-euro annual cut to supplementary pensions, another 20-30 million euros will be slashed, although the details of how this will be done have not yet been decided.

Another major cut will be at the Defense Ministry, where 100 million euros will be slashed from operational costs. Reductions to civil servants on so-called “special salaries” will come into effect earlier than planned, saving another 90 million euros.

“The process for the new program and the cuts have been concluded,” government spokesman Pantelis Kapsis said on Thursday. “There are no more economic issues outstanding.”

Greece hopes that eurozone finance ministers will sign off on the new bailout, of at least 130 billion euros, on Monday. Otherwise, the decision may be referred to a meeting of eurozone leaders in Brussels, where an EU summit is due to take place on March 1 and 2.

There continues to be doubt among some northern European countries about the state of the Greek economy and whether Greece will be able to conduct the reforms.

"The skepticism is especially strong among the AAA states over whether Greece will be able to make it,» Germany's Der Spiegel magazine quoted Austrian Finance Minister Maria Fekter as saying of countries with top-notch credit ratings such as Germany, Finland and the Netherlands.

"The risk of a Greek insolvency is not off the table."

German officials said they wanted greater external oversight of the measures Greece is taking to cut its huge debt, and an escrow account to ringfence funds for debt payments.


Εγγραφείτε στο newsletter μας

Ενημερωθείτε πρώτοι για τα τελευταία νέα, αποκλειστικά ρεπορταζ και ειδήσεις απο όλο τον κόσμο