Greece’s parliament approves new austerity bill

Greek Parliament / Deutsche Welle

DW — Greece’s parliament on Sunday passed another omnibus austerity bill  for tax hikes, more cuts and a new privatization superfund, which will manage almost all state property.

Prime Minister Alexis Tsipras saw 153 members of his coalition vote for the bill, with 145 others voting against the measures. The decision came ahead of a Eurogroup meeting on Tuesday, expected to unlock another tranche of money for the debt-ridden country.

Under its current bailout deal with the European Union (EU), Greece has pledged to bring its primary budget surplus, exluding debt payment, to 3.5 percent of gross domestic product (GDP) by 2018.

 Under the new 7,000-page bill, the VAT rate on food products and drinks is to rise to 24 percent from 23 percent. Petrol, diesel, electricity, internet, mobile communications, cigarettes and alcohol will also be more expensive than before.
Tourists are to pay extra tax for staying at hotels and pay higher entrance fees at museums.

The controversial new privatization fund, controlled by the country’s creditors, is to be used to sell public companies.

A controversial part of the bill includes a mechanism to automatically slash public expenditure in case of budget overruns.

Political parties opposing Prime Minister Alexis Tsipras’ proposal have said the bill goes against the constitution. The heated debate also included comments on how Tsipras’ leftist Syriza party had promised something completely different when it won the elections in 2014.

The latest bill follows similar legislation to cut back pensions and increase tax, passed on May 8. These were to bring in  3.6 billion euros from cuts and revenue to the state budget. Sunday’s measures are designed to bring in an additional 1.8 billion euros, which Athens hopes  will gain the creditors approval and release the funds that will go straight back to the same creditors to pay  loan instalments due.

Earlier on Sunday, transport workers in Athens staged a 48-hour-strike to protest the new tax hikes. Metro, tram and commuter train drivers walked out on Saturday and were joined by bus drivers on Sunday.

Outside the parliament building in Athens more than 10,000 people protested against the unpopular ‘reforms’.