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WORLD NEWS Thursday 22 November 2018

Greece: Creditors approve U-turn on pension cuts

the first time” within an EU bility and growth pact, the tax-relief and welfare pro-
framework that came out bloc’s budget rulebook. grams in 2019, but unions
of the region’s debt crisis. The response from creditors are angry that austerity
The budget provides for a is a fillip to the government measures are set to contin-
primary surplus of almost 4 of left-wing Prime Minister ue for years after Greece’s
percent of GDP this year, Alexis Tsipras which is trail- bailout exit.
and 3.6 percent in 2019. ing rival conservatives in The umbrella union GSEE
Greece has to achieve opinion polls ahead of a called Wednesday on its
high surpluses for decades general election next year. members to join a general
to be able to pay off its The government has prom- strike on Nov. 28, to de-
debts. ised to spend up to 900 mil- mand the end of bailout-
Dombrovskis said the Greek lion euros ($1 billion) from era wage cuts and emer-
budget is considered as cash generated by its bud- gency taxes on income
“compliant” with the sta- get over performance on and property.q

An elderly man smokes a cigar during a rally in Athens, Tues-
day, Nov. 20, 2018. Hundreds of pensioners protested demand-
ing a return of funds lost as part of austerity measures.
Associated Press

By DEREK GATOPOULOS to Greece’s European bail-
RAF CASERT out creditors and the Inter-
Associated Press national Monetary Fund
ATHENS, Greece (AP) — though much of it is due for
Greece’s bailout creditors years following a debt re-
have approved a request lief package agreed earli-
by the country to scrap er this year. Greece ended
pension cuts planned in its third straight internation-
2019 after the country de- al bailout in August but has
livered a strong budget not returned to markets
performance. In a report partly as a result of the tur-
published Wednesday, the moil created by the bud-
European Commission said get standoff in Italy and a
the previously agreed cuts financial crisis in Turkey.
were no longer considered Though the country has no
necessary for Greece to immediate need to raise
meet a primary budget money from markets due
surplus of 3.5 percent be- to a cash buffer provided
fore debt servicing costs. by creditors, it wouldn’t
“The Greek authorities plan be cheap if it wanted to
to implement a freeze in — the market interest rate
pensions until 2022, but on Greece’s 10-year bond
they will not proceed with stands at a relatively high
the pension cuts,” the re- 4.7 percent.
port said. Commission Vice President
The government tabled Valdis Dombrovskis con-
a final version of the 2019 gratulated Greece for sub-
budget to parliament mitting its draft budget “for
Wednesday after getting
the nod from lenders.
According to the draft
budget, the country’s
mammoth debt will de-
cline from 180.4 percent
of annual output this year
to 167.8 percent next year
— a drop from 335 to 323
billion euros ($382 billion to
$368 billion). More than two
thirds of the debt is owed