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Posted on: September 26th, 2012 by AlYunaniya Staff No Comments

Greece: FinMin to brief junior coalition partners on austerity package


photo: ND flickr

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Finance Minister Yannis Stournaras is about to brief coalition leader Evangelos Venizelos and Fotis Kouvelis about the draft of the austerity package that will include measures that aim to save around EUR 13.5 billion euros.

According to media reports, in a meeting yesterday between Prime Minister Antonis Samaras and the government economic team headed by the FinMin, the austerity package was finalised. It included further cuts in salaries and pensions, increase of retirement age and abolition of the tax-free threshold for self-employed professionals. Final decisions will be made in a meeting between coalition party leaders tomorrow.

Sources told Kathimerini, yesterday’s meeting was to agree on the outlines of a package that will be acceptable to the two coalition partners, for an agreement to be reached before a Eurogroup working group on Friday. When they meet, the leaders are also expected to discuss when, and in what form, the package of measures is to be submitted to Parliament.

In comments made to Reuters, FinMin Stournaras referred to the cost of an extension of the fiscal adjustment programme for Greece. “We estimate the funding gap that would be created if we get the two-year extension at EUR 13 to 15 billion,” Stournaras said, adding that the size of Greece’s fiscal deficit was EUR 13.5 billion, hence the need for EUR 11.5 billion in spending cutbacks and EUR 2 billion in new revenues.

Stournaras’s comments came as Christine Lagarde, the head of the International Monetary Fund warned that Greece faces a financing gap that won’t be solved by budget measures being discussed because a weak economy and delayed privatizations have worsened its fiscal situation.

Lagarde said efforts being discussed by the Greek government and the so-called troika to find EUR 11.5 billion in savings won’t be enough to put back on track Greece’s EUR 130 billion bailout jointly funded by the IMF, the European Commission and European Central Bank, Bloomberg reports.

Ahead of today’s 24-hour general strike, government sources expressed concern about industrial action in recent days, particularly by public sector employees, which has slowed down the collection of tax revenue, Kathimerini reports.


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