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Greece says wins bailout extension, finalises cuts

Updated: 2012-10-24 20:53

ATHENS - Greece has been granted its long-standing plea for additional time to push through austerity cuts that have been finalised after months of negotiations, the finance minister said on Wednesday.

"Today, we obtained the extension," Yannis Stournaras told parliament, referring to the additional two years to hit bailout targets that Athens has been lobbying for.

Greece says wins bailout extension, finalises cuts

Employees in Greece's banking sector march to the parliament during a rally against planned changes in their pension fund in Athens October 24, 2012. [Photo/Agencies]

He also said the government would tell European counterparts that it is ready to put its latest austerity package to parliament next week after winning additional concessions from foreign lenders.

A swift deal on the package is crucial for Greece's efforts to unlock more aid under its latest bailout, with the country just three weeks away from running out of cash.

Prime Minister Antonis Samaras's allies - the small Democratic Left party and the PASOK Socialists - have yet to back the austerity package, and will examine the concessions made before deciding their stance, a party official said.

Both parties have refused to support demands by foreign lenders to cut wages and reduce severance payments, but have maintained that they do not want to jeopardise the government or Greece's place in the euro zone.

Stournaras said Greece would tell the Euro Working Group meeting Thursday that it had finalised the package after its 'troika' of lenders - the European Commission, European Central Bank and the International Monetary Fund - made additional concessions.

"This morning, after an all-night effort, the troika backed down on two main issues - severance payments and the notice period required before a layoff," Stournaras told parliament, urging Democratic Left lawmakers in attendance to back the plan.

The package will be put to parliament next week in two separate bills on austerity cuts and labour reforms, he said.

Athens had been trying to clinch a comprehensive deal on the reforms and spending cuts before the Euro Working Group meeting begins on Thursday.