Greece adopts more austerity to unlock bailout

8 years ago - Published in Finance, Fundamental Analysis

Greece's parliament has approved a new package of austerity measures needed to release the next instalment of its multi-billion-dollar bailout, as angry demonstrators protested outside parliament against the new round of austerity.

The measures, which entail $5.4bn in cuts to be implemented in 2019 and 2020, were backed late on Thursday by all 153 members of parliament in Prime Minister Alexis Tsipras' ruling coalition after a fiery debate.
The legislation was backed by all 153 deputies in Prime Minister Alexis Tsipras' left-led coalition. All 128 opposition lawmakers present in the 300-member parliament stood against the measures in a vote just before midnight.

The tax rises and further cuts to pensions were sought by Greece's foreign creditors. 
As politicians traded barbs, about 12,000 people protested outside the parliament in the capital, Athens, for a second consecutive day.

A small group of hooded protesters broke away from the rally and hurled petrol bombs and firecrackers at police guarding parliament. Police responded with teargas dispersing the crowd temporarily.

Eurozone finance ministers meet on Monday to decide if Greece has done enough to receive a €7.5bn (£6.4bn; $8.3bn) loan plus debt relief.
Speaking after the vote, Prime Minister Alexis Tsipras said reporters "Now the ball is in our creditors' court," Tsipras said after the vote. "We expect, and are entitled to, a decision at Monday's meeting, that will adjust the Greek public debt in a way that matches the Greek people's sacrifices."

Deputy Finance Minister George Houliarakis said the austerity measures are a "necessary compromise" between meeting creditors' demands and extending the uncertainty over the country's economic recovery.
Figures released earlier this week showed that Greece had fallen back into recession for the first time since 2012.
The country's gross domestic product (GDP) fell by 0.1% in the first three months of the year after shrinking by 1.2% in the final quarter of 2016, the Eurostat figures showed. Ranked against the European Union as a whole, this fell nearly 27 per cent between 2008 and 2015 for Greece. For Germany, it rose around six per cent. 

Indeed, the latest figures available suggest that more than one in three Greeks are at risk of poverty or social exclusion.

The government, sagging in opinion polls, hopes a conclusion by lenders of its reforms progress, coupled with a restructure to bring down a mountain of overhanging debt, will allow Greece to be included in the European Central Bank's asset-buying programme and return to bond markets in the coming months.