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FinMin: Leaders' agreement on main axes of austerity package

The leaders of the three parties supporting the coalition government have reached agreement on the fundamental axes of a package of austerity measures for cutting state spending by 11.5 billion euro in the next two years (2013-2014), finance minister Yannis Stournaras said after the leaders' meeting on Thursday, adding that "this agreement gives me a basis for a strong negotiation" with Greece's international lenders.

Stournaras, who also attended the meeting between prime minister and New Democracy (ND) leader Antonis Samaras, PASOK leader Evangelos Venizelos and Democratic Left (DIMAR) leader Fotis Kouvelis, said that the package of measures will be tabled for ratification in parliament after agreement is reached between the government and the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) 'troika'. He also said that Greece will seek a two-year extension for its fiscal adjustment, to 2016.

Stournaras, who left open the prospect of a new meeting of the coalition government party leaders, not to discuss the measures but on the "target achievement and measure replacement" clauses, stressing that "the clauses will be symmetrical".
Under a 'deviation clause', or Plan B, being discussed with the Troika, the Greek government will be obliged to take equivalent measures from the hard core (wages, pensions and benefits) in January 2014, for each point of deviation from its targets on primary deficit/surplus in 2013.
Earlier, Kouvelis also said that initial agreement was reached on the basic axes of the 11.5 billion euro package of new measures, speaking to reporters as he exited the meeting of the coalition government party leaders.
"There are still some matters pending, such as the extension," he said, adding that he insists on a clause for replacement of austerity measures when revenues are generated and targets are met, adding that this is a very important element.
Kouvelis said that now the deliberation with the Troika was beginning, adding that this will take place on multiple levels so that when parliament is called on to ratify the measures there will be both a tax and a developmental dimension, while he also appeared certain that there will be an extension, thus easing the burden on the taxpayers..
The DIMAR leader also left open the prospect of another meeting of the party leaders, to finalize the agreement.
Venizelos, on his part, said that the three party leaders had decided on the "basic axes for the final negotiation with the troika, which now need to be made more specific". He noted that the negotiation will not be over the fiscal measures in themselves and that its key element will be an extension of the loans until 2016.
He also emphasised that the result must allow for the immediate and full disbursement of the 31 billion euro in bailout loans and suggested that an extension of the consolidation period might mean that many of the austerity measures would not finally have to be implemented, since the country would meet its targets and have positive growth rates."We want to say that these really are the last measures that will be taken," PASOK's leader added.


Last Updated Friday, 28 September 2012
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