ATHENS, Greece – The Greek parliament is due to vote on a controversial tax and pensions overhaul Sunday ahead of a crunch meeting of its Eurozone creditors as trade union protests against the reforms paralysed swathes of the country.
Leftist Prime Minister Alexis Tsipras pulled forward the vote on the package of painful measures demanded by the terms of its July bailout in the hope that Monday’s meeting in Brussels could move on to the crucial issue of debt reduction.
Greece’s budget deficit has ballooned as it struggles to keep up with mammoth debt payments, which the International Monetary Fund believes is unsustainable.
Trade unions opposed to the reforms are set to keep up the pressure with the third day of a general strike that has paralysed public transport across the country.
The austerity measures are part of a package of painful measures demanded by the European Union and International Monetary Fund in exchange for a huge 86 billion euro ($95 billion) bailout for debt-crippled Greece agreed last July.
Greek Finance Minister Euclid Tsakalotos has called on the eurozone to approve the reforms, warning of a “failed state” if the Brussels talks run aground.
“The elements for closing the first review and providing debt relief are, I firmly believe, all there,” according to a letter to the euro area’s finance chiefs seen by Agence France-Presse (AFP).
Tsakalotos also stated bluntly the cost of a debt cataclysm.
“Nobody should believe that another Greek crisis, leading perhaps to another failed state in the region, could be beneficial to anyone,” Tsakalotos said.
The reforms would reduce Greece’s highest pension payouts, merge several pension funds, increase contributions and raise taxes for those on medium and high incomes.
Tsipras defended the measures on Friday, telling lawmakers from his left-wing Syriza party – which holds a slim majority with 153 seats in the 300-seat parliament – that they would spare the poorest.
Reforming Greece’s bloated pension system is crucial to prevent “the system collapsing in a few years,” the prime minister added.
Despite the pressure from the strikes, which saw more than 7,000 people mass on the streets of Athens on Saturday, Employment Minister Georgios Katrougalos stood by the pension overhaul, pointing to a funding shortfall of two billion euros.
“This reform should have been done decades ago,” he said.
The protests on Sunday are expected to draw huge numbers, with large demonstrations planned linked to celebrations for International Workers’ Day, which were postponed from May 1 because of the timing of Orthodox Easter.
Ahead of the Brussels meet, the creditors themselves have some differences to sort out over extra reform measures demanded by the IMF that could amount to another 3.6 billion euros.
IMF chief Christine Lagarde has warned that there were “significant gaps” in Greece’s reform offers, while European Commission head Jean-Claude Juncker said the country had “basically achieved” the objective of the measures required by creditors.
But both the EU and the IMF have agreed that possible debt relief will be on the agenda. – Rappler.com
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