NEWS

Greek government turns focus to Eurogroup after securing vote on new measures

TAGS: Politics, Economy

Greek Finance Minister Euclid Tsakalotos is to face his eurozone counterparts in Brussels on Monday for talks that are expected to focus on the terms of Greece’s third bailout and the prospects for debt relief following the approval in Parliament on Sunday night of overhauls of the Greek tax and pension systems.

All 153 coalition lawmakers backed the legislation, which is worth 5.4 billion euros in budget savings.

Despite Greece’s keenness to impress creditors with the new laws, no decision is expected at Monday’s meeting.

However, Athens is hoping to secure a positive statement on the outlook for debt relief.

It will also be keen to promote its idea for an automatic mechanism for cutting state spending, basically an alternative for the additional 3.6 billion euros in “contingency” measures the International Monetary Fund wants Greece to legislate now.

Speaking in Parliament before Sunday's vote, Tsipras defended the new measures, noting that the pension reforms leave the majority of main pensions untouched.

Claiming to be undertaking “a massive effort for social justice in conditions of harsh fiscal adjustment,” Tsipras accused opposition parties of not having any serious counterproposals to those of the government.

“We are determined to make Greece stand on its two feet at any cost.”

In a bid to draw investments that will kick-start the economy, Tsipras proposed setting a stable tax rate for 12 years for investments in excess of 20 million euros.

New Democracy leader Kyriakos Mitsotakis called Tsipras’s administration "the most inadequate and dangerous since the restoration of democracy" and accused it of “totally impoverishing the middle class.”

“There is another way, there is hope,” he said, calling for early elections and pledging to cut taxes if he becomes premier. In comments directed at Tsipras, Mitsotakis said: “You’re not a leftist. You’re an opportunist who will do everything to stay in power.”

While MPs debated the bills, thousands of demonstrators marched through the capital. There was a heavy police presence with riot police vans parked outside Parliament and at the entrance to the street leading to Tsipras’s official residence.

There was some small-scale violence with a few dozen youths lobbing firebombs at police who responded with tear gas.

The vote came amid mixed messages from representatives of Greece’s creditors.

Greece has “basically achieved” reform objectives, European Commission President Jean-Claude Juncker said to the German Funke Mediengruppe in an interview that was published on Sunday.

In a letter to eurozone finance ministers, the head of the International Monetary Fund, Christine Lagarde, called for immediate talks on debt relief for Greece.

Lagarde stressed the need to revise the primary surplus target of 3.5 percent of GDP in 2018, saying it was “counterproductive” to expect Greece to meet it.

She also rejected Athens’s proposal for a mechanism for cutting state spending and pointed to “significant gaps” in reforms.

Tsakalotos also sent a letter to his eurozone peers over the weekend, saying that additional “contingency” would not go through Parliament.

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