Business World

Saturday 24 February 2018

Athens tries to soften proposed measures

euro crisis

Renee Maltezou and Jan Strupczewski

GREECE'S new finance minister sought to explain gaps in his austerity plan to EU and IMF officials on Thursday, with European leaders insisting on deep spending cuts and tax hikes if Athens wants to secure funds and avoid potential default.

Euro zone governments are at the same time talking to European banks and insurance companies to try to convince them voluntarily to maintain their exposure to Greek debt when the bonds mature as part of a possible second rescue for Athens.

Greek Finance Minister Evangelos Venizelos met inspectors from the European Commission, the European Central Bank and the International Monetary Fund in Athens to try to iron out differences over a bailout programme.

Mr Venizelos wants to change some measures Greece already agreed with the EU, IMF and ECB this month and present a slightly softer package to the Greek parliament for approval on June 28 in an effort to win over an angry Greek public.

But the changes mean Athens will fall short on austerity expectations.


"There is a gap of €3.8bn out of the total package of €28bn which should be discussed with the troika," a lawmaker who took part in a parliamentary committee with the minister told Reuters.

Athens has agreed to a five-year austerity plan worth €28.3bn in spending cuts and tax rises.

Officials say Mr Venizelos, pledging a fairer tax system, wants to backtrack on plans to lower the income tax threshold and raise a tax on heating oil -- measures that might secure public support, but which create a large funding gap.

If the Greek parliament does not approve the package on June 28, the EU/IMF would not be able to release the next tranche of emergency loans for Greece -- €12bn -- and Athens would default on debts.

The Greek crisis is dominating the fourth EU summit this year as the 27 leaders grope for a solution to debt woes that have forced Greece, Portugal and Ireland to seek bailouts.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business