BBC : Is Greece’s future in the eurozone in question?

09:30 7/11/2012 - Πηγή: BankWars

While the US presidential elections are stealing the limelight, on this side of the pond, votes taking place in the Greek parliament could prove equally crucial.

With the country stuck in its fifth successive year of recession, Greek politicians must on Wednesday night vote on a fresh round of spending cuts and tax hikes totalling 13.5bn euros ($17.3bn; £10.8bn) – the fourth such package since the debt crisis started three years ago.

On Sunday there is a second vote to approve Greek Prime Minister Antonis Samaras’ proposed budget for 2013.

The austerity measures include a two-year increase in the retirement age from the current average of 65, salary and pension cuts and another round of tax increases.

Both these reforms and the proposed budget must be passed for Greece to receive its next tranche of 31.5bn euros of aid, which is already on hold from the end of September. Any chance of getting approval for a subsequent softening of its 130bn euro bailout terms also hinges on these votes.

Without the 31.5bn euros, needed to recapitalise Greece’s banks, Mr Samaras has warned the country will run out of money by the middle of this month, and descend “into chaos”.

With the left-wing and socialist members of the fragile coalition government wavering, Mr Samaras has insisted that these cuts will be the “very last”, with the only other option a eurozone exit leading to what he has estimated would be an 80% drop in the standard of living.

“We promised to avert the country’s exit from the euro and this is what we are doing. We have given absolute priority to this because if we do not achieve this everything else will be meaningless,” Mr Samaras added.