Greece narrowly backs new austerity package

The Greek government has agreed to back the latest round of austerity measures - by a majority of just three. Meanwhile riots rage across Athens.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
While 80,000 protestors gathered around the Greek Parliament last night, 300 MPs debated the future of the Greek economy. Under the terms of Greece’s pact with the EU and the International Monetary Fund, further tough austerity measures must be implemented in order to secure the next round of bailout funds. The government needs to meet a €13.5bn budget cut through tax rises and budget cuts.

Greek Prime Minister Antonis Samaras has warned that without the bailout, the country would run out of money this month. It would face ‘catastrophe,’ he said. Nevertheless, the Parliament was split down the middle throughout the lengthy meeting, but finally voted in favour of the new measures, albeit by a majority of just 153 to 147. That’s almost as close as the US election.

This is the fourth time that Greece has undertake austerity measures in three years. As part of the new austerity package, the Greek retirement age will be raised from 65 to 67 and pensions will be cut by 5-15%. There will also be salary cuts across the board for those on the government payroll, from soldiers to justice officials.

But the cuts will affect everyone in the beleaguered nation: minimum wage is to be reduced, holiday benefits and severance pay cut, and redundancy notice will be reduced from six to four months. The Greek people fear this will make it easier to fire staff in a climate where jobs are already hard to come by. Greek unions have been staging a 48-hour strike in the capital, which came to an end yesterday, protesting the changes to employment law.

‘Many of these measures are fair and should have been taken years ago, without anyone asking us to,’ said Samaras. ‘Others are unfair - cutting wages and salaries - and there is no point in dressing this up as something else.’

But the bailout deal isn’t done yet. MPs still have to meet with European finance leaders on Sunday and have the revised budget approved before the €31.5bn in fresh loans (already five months overdue) will be land in public coffers. Greece is also hoping to secure a further 'emergency growth package' worth a further €10bn to prevent Greece sliding deeper into recession.

After the austerity package was agreed yesterday evening, protests continued throughout the night.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Books for the weekend: Daniel Goleman, Jack Welch, Nelson Mandela

Beaverbrooks CEO Anna Blackburn shares her reading list.

What happens next: COVID-19 lessons from Italian CEOs

Part I: Marco Alvera, chief executive of €15bn Lombardy-based energy firm Snam, on living with...

Coronavirus communications: Dos and don'ts

Uncertainty and isolation make it more important than ever to be seen, to be heard...

Leadership lessons: Mervyn Davies, former CEO of Standard Chartered and trade minister

"People talk about pressure – I worked 24 hours a day. There is more pressure...

How to reinvent your career through motherhood and midlife

Pay it Forward podcast: Former Marie Claire editor-in-chief Trish Halpin and BITE managing editor Nicky...