Greece to vote on $23 billion in new cuts

Protesters march to the Greek Parliament in Athens on Tuesday. Greece’s unions are holding their third strike against a new austerity program. Greece is headed for its sixth year of recession.

Associated Press

Protesters march to the Greek Parliament in Athens on Tuesday. Greece’s unions are holding their third strike against a new austerity program. Greece is headed for its sixth year of recession.

ATHENS, Greece — The Greek government prepared to push a raft of politically toxic new austerity measures through Parliament today, a move aimed at securing international financing and ensuring that the debt-wracked nation will remain in the euro.

But some members of Prime Minister Antonis Samaras' fragile three-party coalition were expected to break ranks and vote against the measures, reviving questions about how long it can hold together. On the streets, austerity-weary Greeks kicked off two days of nationwide strikes Tuesday to protest the new measures, which will total $23 billion over the next four years.

The measures are required to unlock $40 billion in rescue funding the country needs to meet expenses. The European Union's commissioner for economic and monetary affairs, Olli Rehn, said Monday in Brussels that lenders were on track to release the aid.

But analysts said it was unclear if the government could hold together under the pressure.

Since reclaiming power in June, Samaras has labored to restore Greece's credibility with its European partners, particularly German Chancellor Angela Merkel, who has vocally insisted that Greece must remain a part of the euro union.

The new austerity measures, which include further cuts to pensions, civil service salaries and social benefits, are expected to reduce gross domestic product by 9 percent, dealing a fresh blow to an economy entering its sixth year of recession and likely adding to an unemployment rate already exceeding 25 percent.

A total of $17 billion in cuts and tax increases will be implemented in the next two years. But because the Greek economy is shrinking even faster than expected, another $4.5 billion in austerity measures will be required between 2015 and 2016 to meet the country's fiscal targets.

As matters stand, Greece is still staggering under a mountain of debt, which is expected to rise to 189 percent of gross domestic product in 2013, from 175.6 percent now, as interest piles up on all the loans Greece must repay. The deficit next year is expected to swell as well, to 5.2 percent of GDP from a forecast of 4.2 percent.

Greece to vote on $23 billion in new cuts 11/06/12 [Last modified: Tuesday, November 6, 2012 8:57pm]

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