Author: WILL HORNER
Greek MPs late Thursday voted in favor of a packet of pension cuts and tax increases that should pave the way for the next tranche of bailout funding to the indebted nation.
The measures include pension cuts in 2019 and tax increases in 2020, which together would save about €5 billion.
The victory for Prime Minister Alexis Tsipras’ government comes just days before Finance Minister Euclid Tsakalotos heads to Brussels for Monday’s Eurogroup meeting with his eurozone counterparts.
Finance ministers at the Eurogroup meeting are expected to sign off on the release of around €7 billion, which Greece needs to meet debt obligations due in July. Greek debt currently stands at nearly 180 percent of gross domestic product.
Greek MPs debated the measures in a mammoth and heated debate.
Center-right opposition leader Kyriakos Mitsotakis attacked Tsipras for committing to further austerity measures, which he had pledged to oppose.
“If you had the least political agility, you’d do what you did in 2015: after voting … resign,” Mitsotakis said.
He also referred to Tsipras’ premiership as the “biggest political scam the country has ever known.”
“You claimed you’d end austerity and tear up the memorandums, and today you sign the memorandums in pairs and with both hands,” Mitsotakis said to the governing MPs.
Tsipras responded by saying that the government was “heading, after seven years, towards a comprehensive agreement to lead the country out of the memorandums,” and called Mitsotakis a “false prophet.”
As MPs debated, a last minute protest outside the parliament, called for by composer Mikis Theodorakis, drew several thousand people. Protesters quickly turned violent, trying to storm the parliament and hurling Molotov cocktails. Police responded with tear gas.
Ministers will also discuss debt relief, a key goal of the Greek government, at the May 22 Eurogroup meeting. Athens is hoping it can sell the unpopular measures domestically as a strategic victory if it takes home a commitment on debt relief.
On Wednesday, Tsipras seemed confident on that count. The embattled prime minister said the feedback he had receive on the issue was “so positive that we are having difficulty believing it … [it] is too good to be true.”
While Tsipras took power in January 2015 with significant popular support, public approval has plummeted after his government signed up to a third bailout deal with European lenders and passed further painful austerity measures.
Before the vote, government spokesman Dimitris Tzanakopoulos said the implementation of the measures was conditional on debt relief and the involvement of the International Monetary Fund (IMF).
“If the IMF does not [re-join] the [Greek bailout] program, and if we do not receive an adjustment of the Greek debt with detailed medium-term measures, then there is no reason to implement the measures,” he said during an appearance on the Greek Skai TV station.
In order to offset public disapproval of austerity, the government also passed legislation for so-called countermeasures, including housing benefits for vulnerable households, school meals and reduced medicine costs for pensioners. Their implementation will depend, however, on the government attaining a primary surplus of 3.5 percent of GDP plus an additional 1 percent to cover the cost of the countermeasures.