Monday 16 September 2019

Greece votes for austerity while Yanis is in Kilkenny

Polls also show Ciudadanos set to become kingmaker in Spain's parliament as the quickest-growing party after a long economic crisis

Meeting of minds: Former Greek finance minister Yanis Varoufakis, right, with Kilkenomics co-founder David McWilliams at Butler House in Kilkenny city before he opened the sixth Kilkenomics festival on Thursday night.
Meeting of minds: Former Greek finance minister Yanis Varoufakis, right, with Kilkenomics co-founder David McWilliams at Butler House in Kilkenny city before he opened the sixth Kilkenomics festival on Thursday night. Newsdesk Newsdesk

While former Greek finance minister Yanis Varoufakis amused economists in Kilkenny, Greece's parliament approved early on Friday a bill with reforms prescribed by the country's international lenders ahead of a meeting of eurozone finance ministers in three days, which will decide if Athens qualifies for fresh bailout funds.

Greece needs to legislate a series of reforms to pass the first review of a new bailout worth up to €86bn it signed up to earlier this year. It must also revamp its banking system by the end of the year to start talks on much-needed debt relief, which prime minister Alexis Tsipras has made a priority.

A majority of lawmakers in the 300-seat parliament approved a bill which improves on previous legislation for the calculation of pensions, forces Greece to comply with EU energy-efficiency rules, lifts obstacles for the sale of Greece's largest port and scraps tax breaks for farmers.

Passing the bill was crucial, but there are still issues holding up a review which can unlock €2bn of aid, a sub-tranche of an initial €26bn instalment. Greece's compliance assessment to date is set to be on the agenda of a session of eurozone ministers, known as the Eurogroup, on Monday.

Athens and its lenders are still at odds over an effective mechanism for Greece's troubled banks - which will be receiving bailout aid - to address non-performing loans affecting businesses, but also thousands of mortgage holders.

A 23pc VAT tax on private education is also a thorn in talks with lenders. Athens signed up to the measure to plug a €300m-€400m fiscal gap but later found that it was highly controversial in a country where parents supplement perceived shortcomings in the state education system with extra tuition. It is now trying to find other ways to raise the revenue.

Deputy Finance Minister Tryfon Alexiadis said the government would announce its decision over the measures which will replace the VAT on education: "The issue will be solved," he said.

* * *

Romania's ruling leftists will stop short of proposing a new prime minister to replace Victor Ponta, the party's leader said, and wants any nominees to have wide political backing while the centrist opposition eyes an early election.

Ponta, who is on trial in a landmark corruption case, quit on Wednesday in a surprise move, after tens of thousands of protesters across the country had demanded resignations over a deadly fire in a Bucharest nightclub that killed 32 people.

Further peaceful protests involving up to 20,000 mostly young people, some carrying the country's national red, yellow and blue flags, took place in downtown Bucharest in the University Square in the evening.

"We should first agree on a package of political goals for the upcoming period and make sure Romania's progress is continued... and avert seeing a nominee knocking on the doors of parties to try to garner support," Liviu Dragnea, the leader of the Social Democrats (PSD), said after consultations with President Klaus Iohannis.

Mr Dragnea's party is ready to agree either to a cabinet led by a technocrat with "expert ministers" or to a broad-backed "national unity government," he said. It would back early elections.

Holding a snap election would be a first for Romania. It would need either volunteer resignations by all of parliament's political groupings or two consecutive votes of no confidence against two prime ministerial nominees within 60 days of the first nomination.

Regular parliament elections are scheduled for December 2016.

* * *

Spain's prospects could be turned around with a 'big bang' at the start of a new parliament, zeroing in on ending corruption, overhauling education and creating jobs, the Ciudadanos party said as it campaigned ahead of December's vote.

Polls show Ciudadanos (Citizens) is set to become kingmaker in Spain's fragmented parliament. It is the quickest-growing party after a long economic crisis.

It says a political and economic "big bang" is possible by focusing on three key elements: eradication of corruption and cronyism from institutions; new labour-market regulation to boost job creation and reduce job insecurity; and an overhaul of the education system.

"There are things that require (new) laws and that should be discussed and agreed, but there are plenty of things that are just a question of political will and can be changed at no cost at the start of the legislature," Luis Garicano, head of Ciudadanos' economic programme, told Reuters.

Garicano, an economics professor at the London School of Economics and one of the most vocal critics of corruption in the ruling party, said Ciudadanos would overhaul Spain's public sector and take the politics out of the justice system.

The ruling People's Party (PP) has implemented unpopular austerity measures, which it says has nursed the economy back to health, and is expected to win the election but fall short of a majority.

It is not clear, however, if market-friendly Ciudadanos will form a pact with the PP or with the Socialists, the second-biggest party, to form a government after the December 20.

The biggest CIS state poll, published on Wednesday, also showed that there were still many voters to be won over, with the number of undecided voters up almost two points to near 32pc.

* * *

Finland's Economy Minister Olli Rehn said on Friday that a deal between the three parties in the ruling coalition over spending cuts was "quite near", easing concerns that the government might collapse after only five months in power.

Prime Minister Juha Sipila, in a surprise statement on Thursday, threatened to break up the government if it cannot reach agreement by Friday morning on healthcare reform.

The reform is a major part of his plan to save €10bn in the long term to balance public finances in the recession-hit economy that has a fast-ageing population.

Sunday Independent

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