Europe Update: Greek Cabinet Approves Revised Bailout Plan; On to Parliament Sunday

Reuters is reporting that the Greek cabinet has approved a draft of the revised EU/IMF bailout plan including the new demands for further austerity measures.

Recall that earlier in the day Eurozone finance ministers had rejected Greece’s proposed €3.3 billion package of budget cuts as insufficient. The finance ministers then asked for an additional €325 million in budget cuts as well as assurances that the country’s new political leaders would maintain their commitment to austerity measures after the April elections.

The bill will now move to Greece’s parliament, which is scheduled to vote on the bill on Sunday (although some reports say the vote could be postponed until Monday). Although the measure is expected to pass the wildly unpopular package has caused a furor amongst certain factions in Greece’s political parties as no fewer than six cabinet members resigned in protest on Friday.

Prime Minister Lucas Papademos, who was brought to power for his ability to see that the country does what is necessary to acquire the EU/IMF bailout loan deal, told his cabinet on Friday to accept the harsh international bailout deal or condemn the nation to disaster.

"We cannot allow Greece to go bankrupt," Papademos told the cabinet. "Our priority is to do whatever it takes to approve the new economic program and proceed with the new loan agreement."

The Prime minister said Friday that the alternative to the EU/IMF bailout loan funding would be much worse, using the word "catastrophe" four times alone in his opening remarks.

Papademos also asserted his authority to his cabinet members by reminding them that Greece has no viable choices. The Prime Minister went on to show the door to any other political officials that wanted to object to the new plans.

"It goes without saying that whoever disagrees and does not vote for the new program cannot remain in the government," Papademos said in televised remarks.

The new austerity demands by the Eurozone finance ministers includes lowering the minimum wage by 22%, cutting 150,000 public sector jobs and reducing pension benefits.

Although there were protests that turned violent on Friday, Greece faces pressing deadlines for refinancing debts. It is reported that Greece has to rollover €14.5 billion alone on March 20th.

 

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