Addressing the cabinet, which convened to discuss the austerity package, Samaras said the government was determined to push growth measures, such as privatizations, structural reforms and boosting investments.

“If we only focus on the cuts, without any growth measures, we are at risk of the recession spreading to eight years, which would result in economic output having contracted by 30%,” the prime minister reportedly said.

Maanwhile, cabinet formally approved the package of EUR 11.7 billion in spending cuts, that includes drastic cuts to salaries and subsidies in public utilities, ending holiday payments for all pensioners and increases in public transport fares. The list will then receive a final sign-off today by the coalition leaders.

According to media reports, EUR 4.6 billion are earmarked from reduced pensions, EUR 1.39 billion from health, EUR 1.32 billion from state salaries and EUR 1.27 billion from administrative costs. Also, public-sector wage expenditure will be cut by EUR 3.3 billion by applying a 12% cut to the special salaries enjoyed by certain categories of civil servant, resulting in savings of EUR 360 million, while another EUR 339 million will come from cutting what remains from 13th and 14th salaries. In addition, the unified pay scale for all civil servants will be introduced a year earlier than planned, which will result in EUR 120 million euros in savings.

EUR 274 million in savings over the next two years will come from cuts in the salaries of 68,000 employees in public utilities companies by 30% savings, along with a reduction in state subsidies to these companies. Labour reserve scheme would save EUR 167 million and freeze on all promotions in the military and police will save EUR 165 million.

According to protothema.gr, the troika’s technical team has expressed serious concerns as regards the effectiveness of measures EUR 1.4 billion included in the austerity package. For instance, troika specialists have questioned the government’s ability to reduce pharmaceutical expenditure even further (EUR 450 million), given EOPYY’s debts towards the private sector have already skyrocketed. Also, EUR 500 million in defence cuts seem problematic to them, due to strict terms and conditions included in defence contracts. Further, they say that further cuts in operational expenses in the public sector is a measure they keep hearing too often by the Greek government but no results were ever produced (EUR 500 million). At the same time, private sector’s receivables from the state have reached EUR 7 billion. Finally, the troika’s technical team asked to exclude the forecast of EUR 2 billion revenues from battling tax evasion.