Eurozone: Greek Government Agrees Rescue Package

October 23, 2012 by  

Eurozone: Greek Government Agrees Rescue Package, A junior partner in Greece’s governing coalition has refused to lift its opposition to a new package of austerity measures, which bailout creditors have been demanding for months in exchange for more rescue loans.

Fotis Kouvelis, who heads the center-left Democratic Left party, said Tuesday that labor reforms to be included in the austerity package would encourage layoffs and further fuel unemployment, already at a record 25 percent as the country faces a sixth year of recession.

Debt-crippled Greece depends on international rescue loans, issued in return for harsh spending cuts and reforms. It must soon agree with creditors on a new austerity package worth$17.6 billion over the next two years. Otherwise, it won’t receive a desperately-needed new rescue loan payment next month. That could force the country to default on its debt mountain and possibly abandon the 17-country eurozone. “Neither I nor the Democratic Left lawmakers will accept or vote for the changes in labor rights that (creditors) insist on,” Kouvelis said after a meeting of the three coalition leaders under Prime Minister Antonis Samaras, a conservative.

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