Eurozone set to clear new deal

Parliament is due to vote Monday on an extra round of pension cuts ahead of a meeting of eurozone finance minister in Brussels, where Greece’s partners are expected to approve a new bailout of at least 130 billion euros.

Prime Minister Lucas Papademos flew to Brussels on Sunday to prepare for the Eurogroup meeting, which could “result in the need to take very important decisions for the country and require immediate and thorough consultation between the prime minister and minister of finance,” the premier’s office said in a statement. Papademos is also due to speak with representatives of the Institute of International Finance (IIF) about a debt restructuring scheme that could save Greece some 100 billion euros.

Officials from eurozone finance ministries and the European Central Bank held a conference call Sunday to discuss the details of the Greek program. There is concern that Greece might not be able to stick to the pace of spending cuts and structural reforms that the European Union and the International Monetary Fund have asked for. This has prompted fears that Greece’s debt will not be sustainable in the years to come.

An IMF analysis suggested that Greek debt would reach 129 percent of gross domestic product in 2020, which is higher than previously expected. Nevertheless, Austrian Finance Minister Maria Fekter indicated that the funding for Greece would be released.

“At the moment, it appears it will go exactly this way,” she said in a TV interview. “I don’t think there is a majority to go a different way because it would be enormously arduous and cost lots and lots of money.” A eurozone official told Reuters that it did not appear any of the member states wanted to be “responsible for pulling the plug on the deal at this late stage.”

On Saturday, Cabinet agreed on how the government would save another 325 million euros to comply with the spending cuts requested by Greece’s lenders. The measures included further cuts to basic, as well as supplementary, pensions. Some 70 million euros will come from cuts to pensions above 1,300 euros per month. Supplementary pensions will also be cut between 10 and 20 percent but only as long as the monthly payment is above 200 euros, which was the threshold set by New Democracy. Parliament is expected to vote on the measures today after the relevant bill was tabled on Saturday.

Source: Kathimerini