Saturday

23rd Sep 2017

Greece, Spain up for more austerity despite violence

  • Thousands gathered Wednesday in front of the Parliament building in Athens (Photo: mkhalili)

Outbursts of violence in both Greece and Spain are not preventing the respective governments from pushing ahead with the further austerity measures asked for by international lenders.

After weeks of haggling, the three-party coalition in Greece on Thursday (27 September) announced a "basic agreement" on €11.5 billion worth of spending cuts needed for the next tranche of bailout money to be disbursed.

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But one of the three leaders, Fotis Kouvelis, said there were still some "outstanding issues", without giving any details. Centre-right Prime Minister Antonis Samaras has struggled to convince his two junior coalition partners from the left to agree to more wage and pension cuts.

Popular anger against the cuts turned violent on Wednesday as over 50,000 gathered in Syntagma square with riot police firing tear gas on protesters. A general strike also paralysed transportation into and throughout the country, as well as hospitals and schools.

Similar violence erupted in Spain ahead of a fresh set of spending cuts the government was set to approve later on Thursday.

Spain is under a 'light' bailout of €100bn for its banking sector but is expected to ask for more financial assistance soon, as the recession is worsening and unemployment has hit 25 percent, the highest in Europe.

"The violent images from Spain and Greece prove that this violent austerity inevitably leads to social tension," Greek leftist leader Alexis Tsipras said Thursday during a press conference in the European Parliament in Brussels.

Greece will inevitably need to have a second and possibly even a third debt restructuring, according to Tsipras, unless EU leaders agree to slash all its debt and give some "breathing space" to the economy.

Tsipras said this could be done with a "debt conference" as happened for Germany after the second World War, when 60 percent of the country's debt was pardoned and the rest had to be repaid once the economy the started growing.

He criticised the current Greek government for having promised to re-negotiate the terms of the bailout only to agree to all prescribed austerity measures a few months later.

"It is a dead end, a vicious circle of austerity, recession, deficit and debt. Greece's gross domestic product has shrunk by 20 percent from the beginning of the crisis. This is unprecedented in a country where there is no war."

Greece should get more time, France says

France is in favour of giving Greece more time to meet its bailout conditions. Meanwhile, German media says there are plans to increase the EU bailout fund to €2 trillion.

Greek plea for 'breathing space' falls on deaf ears for now

Greece's request for 'breathing space' will go unanswered for at least another month as international creditors say they are determined to wait for an assessment of its reform progress before granting Athens any leeway.

Spanish regions agree to deficit plan

Spain's regions have agreed to spending cuts designed to meet EU targets, with Prime Minister Rajoy ruling out reports that he will ask for a bailout this weekend.

Eurozone gives Greece 10-day ultimatum

Eurozone ministers have given Greece 10 days to implement budget cuts in return for a bailout cash, as Germany Merkel braves protesters on a visit to Athens.

Investigation

EU bank accused of muzzling watchdog

An ongoing review of the the European Investment Bank's "complaints mechanism" could make the oversight branch less independent and less effective.

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