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Greece wins two-year reprieve on bailout program

Greek Finance Minister Yannis Stournaras has said his debt-laden country would be given more time to meet bailout requirements. The reprieve comes in exchange of yet another multi-billion-euro austerity package.

Speaking in parliament on Wednesday, Yannis Stournaras said that Greece now had "an extension" to rein in its runaway debt and reform public finances. However, the Greek Finance Minister didn't say how long the reprieve, granted by its international creditors, would actually be.

In tough negotiations dragging on since July, Athens sought two more years to implement austerity measures imposed by a troika of lenders from the European Central Bank (ECB), the International Monetary Fund (IMF) and the European Commission.

According to media reports Wednesday, the extension would give the debt-laden eurozone country time until 2016 to reduce its deficit to the EU limit of three percent of gross domestic product (GDP) rather than the previous deadline of 2014.

In exchange, Athens has agreed to cut government expenditure by another 13.5 billion euros ($17.6 billion) over the next two years. Stournaras said without the reprieve the government would have had to impose cuts to the tune of 18.5 billion euros to secure a new installment of loans under its 120-billion-euro bailout program.

Stournaras also said the conservative-led three-party government coalition was prepared to put the new austerity package before parliament next week after winning concessions from its foreign lenders.

However, the small Democratic Left party and the PASOK Socialists - junior partners in the government - have repeatedly refused to support cuts in wages and reductions in severance pay, demanded by Greece's creditors.

According to Stournaras, the troika had at least backed down on its demand for lower severance pay.

uhe/mz (AP, AFP, dpa)