Greece seeks to put a stop to fears of a euro exit


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The Independent Online

Talk of Greece exiting the euro will end after critical votes in parliament this week on new austerity measures, labour reforms and the 2013 budget, Greek Prime Minister Antonis Samaras said yesterday.

The three-party government will submit the package of measures to parliament today, and must approve both it and the 2013 budget to receive aid from the International Monetary Fund and European Union that it needs to avoid bankruptcy.

The junior ruling Democratic Left Party has refused to back the mix of tax hikes and spending reductions of €13.5bn (£10.8bn) because they are tied to measures that will cut wages and severance payments and scrap automatic wage hikes.

But Mr Samaras's New Democracy Party and most of the deputies of its coalition Socialist partners are expected to push the package through by a slim majority in a vote expected on Wednesday.Greek politicians should then approve the 2013 budget in another crucial vote on November 11, leading to the release of €31.5bn in aid funds, putting to rest any talk of Greece exiting the euro, Mr Samaras said.

"As soon as the new measures are passed and we get the critical aid tranche, liquidity will start again to feed businesses and households, uncertainty will end, sentiment will change and the fear of a return to the drachma will disappear," he told New Democracy lawmakers at a party meeting.

"All this [talk of Greece exiting the euro] will end irreversibly."

He added that the package would include the last cuts to wages and pensions, a sore point among Greeks weary of a five-year recession.

"In the last two years, through cuts in wages, pensions and government spending, the recession and unemployment, we lost 35 percent of our living standard as a country," he said. "If we had exited the euro, we would have lost twice as much."