Greek minister puts blame on gov’t ally

ATHENS Reuters

REUTERS photo

A long-awaited deal on Greece’s latest austerity package is being held up solely by a coalition ally’s refusal to back labor reforms, the country’s finance minister said yesterday.

Greece’s government has been locked in talks internally with allies and with its European Union and International Monetary Fund lenders on a 13.5 billion euro package of austerity measures that are key to unlocking further aid for the country.

Athens says talks have been largely wrapped up and that the package is ready for a parliamentary vote next week, although the small Democratic Left party has refused to back proposed reforms on minimum wage levels and severance payments. “The only obstacle to an agreement is the Democratic Left’s stance,” Finance Minister Yannis Stournaras told reporters. “I hope that they will eventually agree.”

Lenders confirm improvement

EU/IMF lenders have also said some issues remain before a deal is concluded. Eurozone officials meeting in Brussels yesterday were expected to discuss the austerity package as well as Greece’s long-standing plea for an extra two years to meet budget goals set out in its bailout program.

However, no announcement was made before the Daily News went to print yesterday evening by local time.

Political opposition to the labor reforms is one snag holding up an extension deal, a eurozone official said.

Stournaras had suggested a day earlier that the package would be split into two separate bills on spending cuts and labor reforms which officials said would allow the Democratic Left to vote against the reforms without jeopardizing the entire austerity package.

But Athens now plans to put the cuts and reforms together in a single take-it-or-leave-it bill, Stournaras said, in a move apparently designed to pressure the Democratic Left into backing the entire package.

The small leftist party, which commands 16 deputies in parliament, has repeatedly said it does not want to topple the government but that it cannot vote on reforms that undermine labor rights which have already been eroded.

The party’s leader, Fotis Kouvelis, told Reuters late on Oct. 24 that he was not budging from his stance despite some concessions from the lenders on the proposed reforms.

The austerity package, which has triggered street protests and deepened public anger, includes wage and pension cuts, a drastic reduction in healthcare spending and welfare benefits and a long list of structural reforms to overhaul the economy.