Greece's parliament approved a new property-tax law in a closely watched vote Tuesday, taking a key step in the country's efforts to secure further aid from its international creditors and avoid default.
The measure was approved with 155 votes in favor and 142 votes against, narrowly surpassing the 151-vote majority required for passage in the Greek body. Three lawmakers abstained.
The vote was a crucial test for the Socialist government's ability to enact fresh austerity measures in coming weeks and meet budget goals for 2011 and 2012 in the face of rising internal party resistance. The controversial measures seek to slash pensions and public-sector wages, sparking fears of an open revolt within the ruling party with some lawmakers already calling internally for a coalition government or even snap elections.
Public opposition to the austerity moves continued Tuesday, as subway and bus drivers walked off the job, creating massive traffic jams in Athens for a second consecutive day. Tax collectors and customs officials also joined protest action with a 48-hour strike opposing salary cuts.
Athens' traffic woes are set to worsen Wednesday when employees from all modes of public transport strike, along with taxi owners.
The approval of the property tax is expected to open the way for the return to Athens this week of a troika of inspectors from the International Monetary Fund, the European Union and the European Central Bank. Talks between the troika and the Greek government were abruptly suspended earlier this month over a dispute on whether Athens should take additional steps to meet its budget deficit targets.
"With this measure, we will be able to achieve the fiscal target for 2011 and 2012," Greek finance minister Evangelos Venizelos told parliament ahead of the vote.
Mr. Venizelos said earlier Tuesday he expects Greek lawmakers to vote on the additional fiscal measures and reforms by the end of October.
Without parliamentary approval for the tough measures, Greece may not gain support from its creditors, who are demanding tangible proof that the government will keep its promises after failing to implement earlier commitments.
Only after a positive report card from troika will Greece receive a €8 billion ($10.8 billion) tranche, which is part of a €110 billion bailout from euro-zone members and the IMF. Payment is a must if the government is to pay its bills; it has only enough money to see it through until the middle of next month.
Mr. Venizelos said a decision on fresh aid will be reached in October "in time" for the country to meet its obligations.
"I am very optimistic about ... disbursement of the sixth tranche, as long as we do what is necessary," he said.
Earlier Tuesday, Greek Prime Minister George Papandreou said he could "guarantee" Greece will deliver on all of the austerity pledges made for its first €110 billion rescue program.
Mr. Papandreou also reaffirmed the country will reach a primary budget surplus next year, but urged Europe to stop quarreling, and to concentrate on its proposals and reform projects. "We must forge ahead immediately, not muddle through, with institutional reforms necessary to resist intensifying pressure from financial markets," Mr. Papandreou said in a speech at the Federation of German Industries, or BDI.
His comments came hours before he met with German Chancellor Angela Merkel, who said her country wants a "strong Greece" in the euro zone and reiterated her pledge to offer help to the debt-wracked nation.
The new tax law introduces property taxes in Greece and is designed to cover a €2 billion revenue shortfall in Greece's budget targets this year. The government, which hastily announced the tax under pressure from international creditors earlier this month, originally planned to make the tax temporary through 2012, but the newly enacted law makes it permanent.
Passing further austerity measures will be no easy task for the ruling socialist, or Pasok, party, which has a thin majority in parliament.
Elected in a landslide victory in October 2009, Pasok has seen its popularity plummet after two years of austerity measures it has implemented. Its parliamentary majority has shrunk by six seats, to 154 seats in Greece's 300-member parliament. Public-opinion polls show that if elections were held today, neither the Socialists nor the opposition New Democracy, which opposes the austerity program, would capture enough votes to form a governing majority.
Greece's two main umbrella unions—private-sector GSEE and civil-servants union ADEDY—have announced a nationwide public sector strike for Oct. 5, and a nationwide general strike on Oct. 19.
"Drastic measures have had a dramatic impact on the living standards of our citizens," Greek Prime Minister George Papandreou said in Berlin. "Many Greeks feel they have little left to give."
read more: Olympus Wealth Management
No comments:
Post a Comment