The Greek government has agreed in principle to $30 billion of money-saving austerity measures, which will be required if the country is to receive financial support from the IMF.
“We have basically agreed, and as it stands now announcements will come during the weekend,” said the official, adding that the final details on the package will be completed on Friday.
The austerity measures, which will range from pension overhauls to wage cuts, come at the end of two weeks of talks between the Greek government and a visiting “troika” of negotiators from the IMF, the European Central Bank and the European Commission.
“There was not much room for us to negotiate,” the Greek official said. “This is the way the IMF works—if you want the money, you go by their terms. “
However, Greek labour unions vowed to fight further cuts in spending and entitlements. Union actions such as strikes and protests aren’t expected to derail government overhauls. But political commentators say labour unrest, combined with Greece’s slow-moving bureaucracy, might cause roadblocks that delay the implementation of austerity policies.
The hard part will be getting the Greek people to agree. Greek bonds yields, especially the two-year yield, have eased back substantially from their recent peaks, but remain elevated with the 10-year just below 10% and the 2-year at 12.9%. Still, it might be too early to think that much has changed.
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