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Greece faces new austerity measures

Greek ministers have approved a new round of austerity measures and a 50 billion euro (£44.6 billion) privatisation drive which are essential for the debt-ridden country to continue receiving funds from its international bail-out.

The country is lagging behind in making reforms promised in return for last year's 110 billion euro (£98.2 billion) package of rescue loans. Fellow eurozone governments have warned that if Greece does not enforce new austerity, it will be cut off from aid.

Without the next 12 billion euro (£10.7 billion) instalment from its rescue loans due in July, Greece, which remains stuck in recession and locked out of international bond markets, will default on its massive debts.

Finance Minister George Papaconstantinou said the plans were approved by the Cabinet and submitted to Parliament.

No specific date has been set for a vote in the 300-member legislature, where the governing Socialists hold a six-seat majority, but three Cabinet officials said they expected it to be held before June 28.

The new plans include a remedial 6.4 billion euro (£5.7 billion) package of cuts and tax hikes for this year, a renewed austerity drive for 2012-2015 and the privatisation programme.

"We have sought and we have found the fairest possible solution" in the new austerity cuts, Prime Minister George Papandreou said, according to another Cabinet official who was reading from a text of the premier's remarks.

Eurozone finance ministers meeting in Brussels on June 20 and EU leaders gathering on June 23-24 are to discuss Greece's situation.

"We expect the Greek parliament to approve the measures put forward by the Greek authorities in the last review of the troika, so that the euro area finance ministers can take this into account when they decide on the next disbursement," Amadeu Altafaj-Tardio, a spokesman for EU Monetary Affairs Commissioner Olli Rehn, said in Brussels shortly before the Cabinet approval.

In Athens, Cabinet officials said details of the measures would be announced later. One official said they included an extra income tax levy of between 1% and 3%, depending on base salary, for the next four years, and retroactively applicable to last year.


From Belfast Telegraph