Greece: concrete austerity package for vague commitments

EPA / ORESTIS PANAGIOTOU

Greek Prime Minister Alexis Tsipras leaves the pontium after delivering his speech in the Greek Parliament, during the debate of the draft bill, in the Greek Parliament in Athens, Greece, 18 May 2017. The draft law on the ratification of the agreement with Greece's lenders was tabled in parliament plenary on 17 May and the discussion is expected to be concluded late on 18 May with the speeches of the political leaders and the voting procedure.

Greece: concrete austerity package for vague commitments


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By 153 votes in favour, 128 against, and 19 abstentions, the Greek Parliament narrowly passed the latest €4,6bn austerity package required to unlock financial aid. Given a series of pre-legislated measures, the achieved austerity package could lead to cuts worth € 7.6bn.

Pensioners, workers and professional farmers will be mostly affected by the 2019 -2020 austerity package, which narrowly passed with the votes of SYRIZA and its junior far-right coalition partner, ANEL, on Thursday evening.

EU Commission welcomes Athens vote

The European Commission welcomed the vote on Friday. The spokesperson for the Financial Affairs Commissioner, Pierre, Moscovici, Annika Breidthardt, expressed the hope on Friday that implementation can be secured on the basis of the broadest possible consensus. New Europe understand that a Commission compliance report is expected on Sunday, before a Eurogroup meeting on Monday, in Brussels.

941 pages voted ahead of 22 May Eurogroup

For the conclusion of the second review of the third bailout package, Greece will introduce the 14th consecutive wave of pension cuts, as well as tax hikes, energy sector reforms, further privatizations, and a roadmap for the waiving of capital controls. Finance Minister Euclid Tsakalotos said on Thursday that Greek capital controls should be lifted by the end of 2017.

The two-day debate prior to the vote, in parliamentary committees and in plenary, took place in a tense climate. Golden Dawn MPs were voted out of the plenary after MP Ilias Kaidiaris, physically assaulted the conservative ND MP, Nikos Dendias, on Monday.

The parliamentary debate took place in the context of a general strike and thousands of protestors outside the parliament, escalating into riots both in central Athens and Thessaloniki.

In the forthcoming Eurogroup meeting on Monday, 22, the Greek government expects all four institutions – the European Central Bank, European Stability Mechanism, European Commission, and the IMF – to sign off the preliminary agreement. The bailout disbursement, however, will not be available for Greece immediately. According to a senior EU official, the disbursement may delay for as much as p eight weeks.

The uncertainty of the timely disbursement of the next tranche is undermining the economy, with Greece returning to recession. Last weekend, Greece downgraded its growth projections from 2,4% to 1,8% for 2017.

According to Eurogroup president Jeroen Dijsselbloem, Greece is expected to maintain a 3.5% primary surplus until 2022.

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