World Economy

Protests Rage as Greece Offers Lenders More Cuts

Protests Rage as Greece Offers Lenders More CutsProtests Rage as Greece Offers Lenders More Cuts

Protests took place in the Greek capital of Athens and the northern city of Thessaloniki at the weekend as the government passed reforms that it hopes will persuade lenders to release more financial aid.

In the early hours of Monday morning, the Greek parliament approved a controversial package of pension and income tax reforms in order to meet fiscal targets agreed with lenders in return for a third bailout of €86 billion ($98.1 billion), CNBC reported.

Ahead of the vote, opposition politicians criticized the leftist-led government headed by Prime Minister Alexis Tsipras, with several warning that the measures will lead Greece deeper into recession.

The measures are meant to ensure that Greece can meet an agreed 3.5% budget surplus target before interest payments in 2018, helping it to regain bond market access and render its debt load sustainable.

Thousands of anti-austerity protestors gathered outside the Greek parliament on Sunday with some clashing with police who deployed tear gas when Molotov cocktails and stones were thrown at the parliament building and officers. The protests came amid a three-day general strike against the cuts which brought public transport to a standstill and shut down media outlets.

Greek officials hope that by passing the measures, the bodies overseeing the country’s third aid program–the European Commission, the International Monetary Fund and the European Central Bank, along with the Eurogroup of eurozone finance ministers–will be persuaded to unlock another tranche of aid to Greece.

The latest reaction of the so-called “troika” of lenders should be seen on Monday when the Eurogroup meets to discuss Greece’s progress on reforms and fiscal targets and the latest vote in parliament.