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Greek parliament ratifies key tax, pension system reform

Editor: zhangrui 丨Xinhua

05-09-2016 08:27 BJT

by Maria Spiliopoulou

ATHENS, May 9 (Xinhua) -- Greek parliament approved on early Monday a contentious law overhauling the social security and tax system, just hours ahead of an extraordinary Eurogroup meeting in Brussels set to clear the way for the release of further bailout loans to Athens and start talk on debt relief.

The legislation, which has sparked fierce reactions by opposition parties and trade unions, passed with the 153 votes in favor of all MPs of the two-partite ruling coalition, while 143 lawmakers voted against. A total of 296 legislators participated in the roll call vote held Sunday night and four were absent.

The controversial bill introduces a new round of pension cuts and increases in contributions to social security funds and taxes.

According to the Left-led government, the measures will ensure the sustainability of the pension system and support wider efforts to restore stability and economic growth after six years of austerity and deep recession.

During a speech before the plenary shortly before the vote, Prime Minister Alexis Tsipras said that the government intended to fairly distribute burdens.

"The bill we put to vote tonight aims to ensure the sustainability of the pension system and promote social justice," the Greek premier said.

However, critics of the new law claimed that over taxation through direct and indirect taxes and hikes in payments to funds will "strangle" the poorest and middle income earners.

The vote in parliament followed a long string of massive protests organized by umbrella trade unions of public and private sector employees, the self-employed, farmers and other professionals outside the parliament building in Athens and major cities nationwide throughout Sunday.

Over the past six months labor unions have staged several strikes and demonstrations against the "destructive" reforms.

Addressing the parliament on Sunday evening, main opposition New Democracy party leader Kyriakos Mitsotakis accused the government of wasting time, bringing forward proposals bound to fail and leading the country off the rails. He repeated a call for new general elections.

On his part, Tsipras responded that he saw no credible, better alternative proposals on the table, and argued that such reforms open the way for the disbursement of the next bailout tranche to Athens and the start of the much-delayed discussion on debt relief measures.

The Left-led government accelerated procedures for the ratification of the bill before Monday's Eurogroup meeting to show willingness to bring change and boost its bargaining position, cabinet ministers have explained.

The pension and tax reforms are key parts of the first 5.4 billion euro worth package of measures international creditors requested since autumn in the context of the first review of the third Greek bailout sealed in July 2015.

In the official agenda for Monday's meeting, the Eurogroup said it would assess the progress made to conclude the review.

Addressing the parliament during the debate Finance Minister Euclid Tsakalotos said that on Monday's meeting he will present Athens' proposal for a safety mechanism to address any shortfalls from the goal to achieve 3.5 percent of GDP primary surplus in 2018.

Greece rejects the International Monetary Fund's request for the immediate legislation of extra contingency measures worth 3.6 billion euros to cover for gaps should Greeks fail to meet the 2018 goals. (1 euro=1.14 U.S. dollars)

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