Gov’t looks to loan funding, debt relief after approving measures

Gov’t looks to loan funding, debt relief after approving measures

Finance Minister Euclid Tsakalotos is to meet his eurozone counterparts in Brussels on Tuesday for a meeting expected to yield approval for up to 11 billion euros in rescue loans though a firm commitment on alleviating Greece’s debt appears to be rather unlikely.

The Eurogroup summit comes two days after the government pushed into law a new batch of austerity measures including an increase in the highest rate of value-added tax, new rules for the management of nonperforming bank loans, a controversial new privatization agency and the introduction of a so-called contingency mechanism that would automatically cut state spending if Greece misses budget targets.

Although the European Commission indicated that a tranche of around 11 billion euros has been earmarked for Greece, expectations for a firm commitment as regards Greek debt are lower as the Europeans and the International Monetary Fund still differ in their proposed approaches.

Prime Minister Alexis Tsipras discussed Greece’s reform progress in a meeting with German Chancellor Angela Merkel on the sidelines of a humanitarian summit in Istanbul yesterday. According to sources, Merkel struck a reassuring tone, saying she was certain that the Eurogroup would proceed smoothly on Tuesday. 

Following Sunday’s approval in Parliament of a series of new austerity measures, the leftist-led coalition now hopes to focus on passing legislation more in tune with its ideals and long-term goals. A string of bills are being drafted with emphasis on boosting social welfare and attracting investments, sources said.

The government emerged from Sunday’s austerity vote relatively unscathed.

All 153 coalition MPs supported the multi-bill in principle, with a single lawmaker voting down two articles, relating to the creation of a new privatization fund and the adoption of the contingent mechanism.

After her deviation from the government line created some discomfort in the ranks of the coalition, SYRIZA MP Vasiliki Katrivanou resigned early on Monday. “It is a difficult decision, politically and personally, but one that I felt was necessary,” said the outgoing lawmaker from Athens.

She said that she felt the government was increasingly unable to exercise control over its policies as a result of growing “oversight” from its lenders.

Katrivanou handed over her seat and was replaced by Giorgos Kyritsis, the spokesman of the government’s coordinating committee for the refugee crisis.

Commenting, a source close to Prime Minister Alexis Tsipras said Katrivanou’s departure was not a shock. “It would have been a shock if she had voted ‘no’ and kept her position,” the aide said.

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