NEWS

EU sweetens deal for Greece, pushes austerity

European Union leaders meeting in Brussels on Thursday sought to encourage Greece to push through a new raft of austerity measures in a crucial Parliament vote next week, pledging an additional 15 billion euros in aid to boost growth and employment in the debt-ridden country and saying that Greek contribution to EU-subsidized projects would be limited to 15 percent.

European Council President Herman Van Rompuy told a press conference that support from the private sector would be involved in a new support package for Greece. At the same press conference European Commission President Jose Manuel Barroso said that an additional 15 billion euros could be disbursed to help Greece boost sluggish growth and tackle rising unemployment. He added that Greece?s contribution to EU-subsidized projects in the country would be limited to 15 percent.

However, in a joint statement, EU leaders attending the summit said any new support ? including the scheduled disbursement of a 12-billion-euro tranche of rescue funding next month – would be dependent on Greece pushing a new package of austerity measures ? the government?s so-called midterm fiscal program ? through Parliament next week. The statement recognized the ?significant progress? made by Greece and the ?strong commitment? displayed by the government in persisting with its austerity drive. But it emphasized that ?the complete package of reforms that has been agreed with the Commission, in cooperation with the European Central Bank and the International Monetary Fund and the adoption by the Greek Parliament of the fiscal strategy and privatization program must be urgently completed in the coming days.?

The statement reiterated appeals to Greek opposition parties to support the austerity program and facilitate its implementation following the persistent rejection of the plan by conservative New Democracy leader, Antonis Samaras, who was in Brussels on Thursday for a meeting of conservative MPs from various EU countries.

According to sources, Prime Minister George Papandreou asked his EU peers to commit to pledging another three years of rescue funding to Greece and was given a positive answer, on the condition that austerity measures are implemented.

Addressing reporters after the first session of talks in Brussels late Thursday, Papandreou said, ?We received the support of our partners and this not only a green light but also a very positive sign for the future of Greece.?