Greece unveils last tweaks to new austerity program, on the eve of expected loan approval

ATHENS, Greece – A day before it hopes to secure release of a vital rescue loan payment, the Greek government has presented emergency legislation to tidy up the last loose ends in its austerity commitments to bailout creditors.

Greece is still waiting for a €31.5 billion ($40 billion) loan – part of international rescue packages worth €240 billion, and that started in 2010. The loan was due to have been signed off last week at a meeting in Brussels of the finance ministers from the 17 European Union countries that use the euro.

However, the meeting failed to agree on how to get Greece’s bailout program back on track Greece and decided to delay the €31.5 billion tranche, pushing the country closer to bankruptcy and a possible exit from the euro. Another meeting, set for Tuesday, was called so that the 17 ministers and representatives from Greece’s international creditors can reach an agreement on when Athens can get the money.

Labouring under a mountain of debt and facing a gaping budget deficit, Greece has been relying on international bailout loans, under terms supervised by the so-called troika – the International Monetary Fund, the European Central Bank, and the European Commission, which is the European Union’s executive branch.

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To receive the aid, Greece has had to impose strict austerity and reform measures. Two weeks ago, the coalition government narrowly succeeded in passing a €13.5 billion package of cuts, tax increases and reforms in order to secure the latest loan payment. Weighed down by austerity, the country is mired in a deep recession heading into its sixth year with more than a quarter of Greeks unemployed.

The main aim of the bailout program is to right the country’s economy and get it to a point where it no longer relies on international aid and can independently raise money on the debt markets. The bailout program was supposed to steadily reduce Greece’s debt when it reached 120 per cent of its annual gross domestic product – a level generally considered sustainable. The deadline for this target was 2020 but it’s been clear for months that the country is way off track from achieving that.

The question of debt sustainability is as important as it is divisive: If Greece’s debts can’t be reduced to a level where the country can pay them down, the billions of euros in bailout loans given to Greece will have been wasted.

Last week’s meeting foundered on whether Greece should be given a two-year extension to 2022 to reach the 120 per cent target. It did, however decide to give Greece two more years to 2016 to impose the austerity measures and reform its economy.

The two legislative acts published Monday by the Greek government must be approved by Parliament within 40 days.

They cover spending cuts and reforms, from increasing state spending accountability to reducing the pensions of Parliament employees – a pampered group of state employees that commonly includes politicians’ relatives.

Finance Minister Yannis Stournaras says Athens has now met all necessary requirements.