(Athens, Greece) – On Sunday, May 22, 2016 the Greek Parliament voted on additional austerity measures. The vote occurred after some debate, and the parliament needed to decide if it was willing to approve additional government cuts and also new tax increases. These measures were required in order for the international creditors to release new bailout funds. The issue as to whether or not additional austerity is the best way to approach healing Greece’s struggling economy has been heavily debated since Greece secured its first round of bailout funds back in 2010. The Eurogroup’s finance ministers are scheduled to meet soon in order to review Greece’s bailout package and determine whether or not they are willing to release more funds. In order for Eurogroup talks to even proceed, the Greek Parliament needed to vote in support of these austerity measures. Although some have supported these measures, they have also caused strikes and protests.
The new bill, which was over 7000 pages long, raises sales tax and also promises to slash government spending considerably if Greece fails to meet its fiscal targets in order to be able to make their loan payments. This was one of the main points that the international creditors were concerned about. They wanted to make sure that Greece would meet its fiscal targets and that they would have the funds in order to be able to make their loan payments. In voting in favor of the new bill, Greece has promised that it would bring their budget surplus to within 3.5% of the country’s gross domestic product by 2018. It is currently at around 7.2% of the GDP.
These pending measures have led to protests and strikes, and this weekend was no exception. Around 10,000 people stood in the streets to protest the tax hikes, pension cuts, and other austerity measures. Despite the unpopular sentiment, parliament voted in favor of the new measures. Prime Minister Alex Tsipras has said that the believes these measures are necessary to help Greece enter into a period of growth in the future. Greece and its European Creditors have been concerned about Greece’s mounting debt for some time. Among those who have criticized these strict austerity measures are the International Monetary Fund, who maintains that the high loan payments would prevent Greece from making any economical strides in the future. On Thursday, the IMF said that they believe that Greece needs a period of time that is free from making debt payments in order to give the economy a chance to rebound. Other international creditors disagree and feel that being strict with Greece is the best approach.