Greek political leaders agree a last-minute deal on austerity measures needed to qualify for a bailout worth billions. But unions, who say the measures will create “misery”, are planning strikes.
Greece had to agree the package of cuts and reforms in order to access its second international bailout and avoid a chaotic default.
European Union partners and the International Monetary Fund (IMF) have been exasperated by broken promises and weeks of wrangling, and demanded the measures before they would release the 130bn euro bailout cash to Greece.
The last-minute discussions went so close to the wire that Finance Minister Evangelos Venizelos was forced to set off to join the country’s financial backers in Brussels without a deal. Pension cuts had remained a stumbling block in the all-night talks involving leaders of the three Greek coalition parties as well as inspectors from the IMF and the EU.
But the deal was made on Thursday in talks with the troika of the European Commission, the European Central Bank and the IMF.
The painful measures that create misery for the youth, the unemployed and pensioners do not leave us much room. Greek union leader, Ilias Iliopoulos
The office of Greek Prime Minister Lucas Papademos said in a statement on Thursday: “The consultations between the government and the troika on the issue which remained open for further discussion were successfully completed this morning. The political leaders agreed on the outcome of these talks.”
However there are still several hurdles for embattled Greece.
First of all, ministers of other eurozone countries warned that Greece had not yet put in place the measures agreed when it received its first bailout in May 2010.
German Finance Minister Wolfgang Schaeuble said: “Greece has to implement what it has not implemented from the first programme before we can decide on a second.”
The other hurdle is the vast public opposition to the cuts among the Greek people. Deputy Labour Minister Yannis Koutsoukos resigned over a package which he said would be “painful for working people”.
Greece also said it had agreed an outline deal with private creditors on a bond swap, in which the creditors would give up about 70 per cent of the value of their bond holdings – reducing Athens’ debt pile by about 100bn euros.
The country is in the fifth year of a deep recession. Its two major labour unions called for a 48-hour strike for Friday and Saturday over the reforms.
“The painful measures that create misery for the youth, the unemployed and pensioners do not leave us much room,” secretary general of the ADEDY union, Ilias Iliopoulos, said.
“We won’t accept them. There will be a social uprising.”