Greece accelerates austerity cuts in return for aid
The Greek government is to impose tougher austerity measures in a move to persuade international lenders to give it more bailout funds.
A cabinet meeting on Wednesday agreed to further cuts in pensions, to extend a property tax, and to put tens of thousands of public workers on notice.
It follows two days of tough talks with the International Monetary Fund (IMF) and European authorities.
Some state pensions will be cut by up to 20%, a government official said.
The Greek cabinet met for more than six hours to discuss further austerity measures in return for an 8bn-euro (£6.9bn) tranche of aid needed to avoid default.
Athens has been in two days of negotiations with the so-called troika of the IMF, European Commission and European Central Bank over the terms of its bailout.
The new measures include raising the number of civil servants to be suspended on partial pay to 30,000 by the end of this year from 20,000.
Monthly pensions above 1,200 euros will be subject to a 20% cut of the amount above that threshold.
Pensioners below the age of 55 will see a 40% cut in the amounts of their pensions above the 1,000 euros limit.
Riots and strikes
Government spokesman Ilias Mossialos said the series of measures agreed by the cabinet on Wednesday "would allow us to comply with the bailout plan through 2014.
"This sends a message to our partners and to markets that Greece both wishes and is able to fulfill its commitments and remain at the core of the eurozone and the EU," he said.
Mr Mossialos said discussions with the troika would be completed after the arrival of inspectors early next week.
Fears in the financial markets that Greece was close to defaulting on its debts had sent share prices tumbling and the euro lower.
The prospect of more tax increases and spending cuts are likely to be met with mounting opposition in a country that has already seen riots and general strikes by public sector workers.
Greece has been dependent since last year on rescue loans from a 110bn bailout fund set up to prevent eurozone countries from defaulting.
The country was due to receive 8bn euros next month, but the troika suspended a decision on signing off the aid because it was unclear that Greece was meeting the austerity conditions attached to the money.
The government will also speed up privatisations, and plans to open up closely regulated professions to more competition.