10 Days Remaining

Tuesday 10th
posted by Ben Chacko in World

EUROZONE finance ministers met yesterday to rule on whether the Greek government’s sweeping spending cuts have been enough to merit its next batch of bailout loans.

Alexis Tsipras’s Syriza administration forced through a further round of punishing cuts in the early hours of Monday, slashing payments to the poorest pensioners and lowering the threshold above which tax is levied on income.

A “solidarity levy” imposed on all taxpayers since last year will also be increased, although the government did introduce a national pension set at €384 (£305) a month.

But with employee contributions to social security and pension funds ramped up, most Greeks will suffer financially from the changes.

The wildly unpopular cuts were condemned by all opposition parties — even the right-wing New Democracy lamented a “tombstone for growth” — and provoked a general strike and demonstrations that have lasted since Friday.

Communist Party of Greece leader Dimitris Koutsoumpas declared that the supposedly anti-austerity government had “surpassed every boundary of political wretchedness.”

Eight years of savage cuts have reduced the size of the Greek economy by over 25 per cent and over a quarter of the workforce is unemployed.

Mr Tsipras hoped to convince EU chiefs to relieve some of the country’s debt or renegotiate the timetable for repayment.

But eurogroup chairman and Dutch Finance Minister Jeroen Dijsselbloem said he did not expect “definite conclusions as yet.”

And ministers from Germany, Italy and Ireland hinted that debt relief was unlikely. A Greek “haircut” was “not on the table,” Italian Finance Minister Pier Carlo Padoan said.

A new deadline of May 24 was set for decisions on whether to unlock the next €5 billion (£3.9bn) tranche of bailout loans, agree on “contingency measures” which would kick in automatically if Greece fails to meet Brussels’s austerity targets and find a “mutually agreeable” way to render Greek debt — currently 180 per cent of GDP, having only increased under austerity — more sustainable.

Greek Labour Minister George Katrougalos pleaded that his country could not accept “additional actions” to reduce government spending beyond the massive round of privatisations and pay and pension cuts that Syriza accepted last summer in return for an €86bn (£68bn) bailout to enable it to repay foreign creditors.