Europe

Greece leaders agree bailout cuts package

Members of Greece's public power corporation workers union (GENOP) march during a protest in Athens February 9
Image caption Greece has been convulsed by strikes, protests and riots over existing austerity measures

Greek politicians have reached a deal on austerity measures needed for a new 130bn euro ($170bn; £110bn) bailout, Prime Minister Lucas Papademos says.

He announced the deal after days of talks with his coalition partners.

Eurozone ministers meeting in Brussels need to back the plan, but one minister has already expressed doubt that the deal is ready to be approved.

Trade unions have promised strikes on Friday and Saturday to protest against the proposals.

Greece is trying to negotiate the bailout from the EU and International Monetary Fund (IMF).

It is the second such bailout, and lenders have insisted on more austerity measures in return for the loan.

Eurozone ministers need to approve the plan, then it has to pass a vote in the Greek parliament.

Previous votes on austerity measures have sparked huge protests in Athens.

'Social uprising'

The prime minister held talks for eight hours on Wednesday night with the leaders of the three parties in his coalition - Pasok, New Democracy and the far-right Laos party.

The talks ended with no agreement on pension reform, where the government was attempting to make 300m euros of savings.

Hours later the prime minister announced a compromise, but gave no details of the deal.

Mr Papademos said in a statement that the EU, IMF and European Central Bank (ECB) - the so-called troika - were happy with the deal.

"The consultations between the government and the troika on the issue which remained open for further discussion were successfully completed this morning," Mr Papademos said.

The IMF later said it was still in talks with the Greek government, reportedly seeking assurances that the agreed measures would not be affected by elections due in April.

And Luxembourg's Prime Minister Jean-Claude Juncker, who is head of the so-called eurogroup of finance ministers, said he doubted whether the Greek plan was ready for approval.

The IMF, EU and ECB were demanding that the Greeks make cuts of 1.5% of GDP, slash pensions and make thousands more civil service job cuts.

They also told Athens to make its economy more competitive by introducing flexible labour laws and cutting the minimum wage.

ECB chief Mario Draghi said Mr Papademos had spoken to him about the deal.

"This afternoon we will be having a eurogroup meeting with the ministers, and we will be having a full report of this, the agreement, and also a discussion of the further steps," he said.

Last year Greece agreed to huge public sector job cuts and tax rises as part of a deal to release funds for a previous bailout.

The previous round of cuts to public spending sparked huge unrest, general strikes and riots.

The socialist government eventually fell late last year and was replaced by a government led by technocrats.

But Greece remains mired in recession with an unemployment rate of about 20%, and the austerity policies remain deeply unpopular with much of the public.

Even before the new proposals were announced, unions representing about half of Greece's workforce said they were calling a strike for Friday and Saturday - the second strike this week.

"The painful measures that create misery for the youth, the unemployed and pensioners do not leave us much room," Ilias Iliopoulos of the ADEDY union told Reuters news agency.

"We won't accept them. There will be a social uprising."

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