New agreement reached between Greece and its international creditors
Antonis Samaras, Greece Prime Minister, announced that the necessary agreement was reached with its international creditors on new austerity measures in order to unlock new bailout loans.
The negotiation on the measures and the budget was concluded. If the Greece Parliament will approve a new round of cuts, it will keep Greece in the 17-nation Euro-zone.
Mr. Samaras has notified that the country will run out of cash next month. If all the stalled reforms progress, the release of a €31.2 billion (£25.2 billion) loan installment from its EU-IMF financial assistance package will be secured.
The PM was trying to convince his socialist and moderate leftist allies to push the measures through the Parliament by November 12 2012. It is when Euro-zone finance ministers are expected to decide on whether to release the loans.
The Democratic Left party that supports the coalition continues to oppose an additional raft of required labour reforms. They say it goes beyond a prior initiative by Greece to cut spending by €13.5 billion (£10.9 billion) over the next two years.
The 'Troika' of creditors – the EU, IMF and the European Central Bank –insists on additional measures to cut labour costs and increase mobility.
The leftists argue that such measures are counter-productive. They would force the state to pay more in jobless benefits. They also claim that it is socially unfair when the country already has unemployment rate of over 25%.
The 2013 budget will be discussed in the Parliament on Wednesday October 31. A vote on a first part of the austerity measures involving privatisation will also be held during the day.
The government has enough votes in the Parliament to push the overall package through even if the moderate leftists object the proposal.
Hannes Swoboda, head of the socialists and social democrats in the European Parliament, also insisted Athens to approve the measures as soon as possible.