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The government decreased by 1 billion to 10.5 the savings that will come from reductions in public expenditure, while raising from 2 to 3 billion the revenues that will be derived from tax increases over the next two years or four if Greece’s lenders agree to an extension to the adjustment period.
Prime Minister Antonis Samaras, Democratic Left’s Fotis Kouvelis and PASOK’s Evangelos Venizelos discussed the package yesterday and gave it the green light, although Venizelos and Kouvelis expressed some reservations.
Democratic Left wants the troika to accept a clause that will allow Greece to ease up on spending cuts if it beats its targets. The troika, however, has indicated that if Greece were ahead of its targets, any extra savings would simply go towards building a bigger primary deficit.
Of the €10.5 billion in spending cuts, €6.5 billion is coming from cuts to wages, pensions and benefits. The rest is due from savings produced by structural reforms. Up to €8 billion of measures are due to be implemented next year.