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| Greece Agrees on New Package of Budget Cuts and Taxes | Greece Agrees on New Package of Budget Cuts and Taxes |
| (35 minutes later) | |
| ATHENS — After weeks of wrangling, Greece’s coalition government said it had reached a basic agreement on Thursday over highly unpopular new austerity measures that could set off a new round of social unrest. | ATHENS — After weeks of wrangling, Greece’s coalition government said it had reached a basic agreement on Thursday over highly unpopular new austerity measures that could set off a new round of social unrest. |
| The government of Prime Minister Antonis Samaras must now present the proposed actions — $15 billion in cuts to pensions, salaries and state spending, and at least $2.6 billion in new taxes — for further discussion with the foreign lenders, who have demanded them in return for releasing the next portion of aid to the stricken country. That financing, about $40 billion, was withheld this year during a tumultuous period in which Greece had two rounds of elections in May and June. | The government of Prime Minister Antonis Samaras must now present the proposed actions — $15 billion in cuts to pensions, salaries and state spending, and at least $2.6 billion in new taxes — for further discussion with the foreign lenders, who have demanded them in return for releasing the next portion of aid to the stricken country. That financing, about $40 billion, was withheld this year during a tumultuous period in which Greece had two rounds of elections in May and June. |
| Finance Minister Yannis Stournaras said Thursday that the accord would form the foundation for negotiations on Monday with officials of the so-called troika of lenders — the European Commission, the European Central Bank and the International Monetary Fund — who left in a huff last week after tensions rose during talks. | Finance Minister Yannis Stournaras said Thursday that the accord would form the foundation for negotiations on Monday with officials of the so-called troika of lenders — the European Commission, the European Central Bank and the International Monetary Fund — who left in a huff last week after tensions rose during talks. |
| The government did not release specifics of the agreement, though it is said to call for a rise in the retirement age to 67 from 65. It comes ahead of another critical month for Greece, which has been asking for more time to bring its finances under control. The troika has so far rebuffed that request, questioning whether the country can actually make good on its promises. | The government did not release specifics of the agreement, though it is said to call for a rise in the retirement age to 67 from 65. It comes ahead of another critical month for Greece, which has been asking for more time to bring its finances under control. The troika has so far rebuffed that request, questioning whether the country can actually make good on its promises. |
| For its part, the Greek government has been embroiled in an internal debate over the austerity measures required by the troika, which are equivalent to 6 percent of Greece’s gross domestic product and politically toxic to all three parties in the coalition, especially the Socialists and the smaller Democratic Left. | For its part, the Greek government has been embroiled in an internal debate over the austerity measures required by the troika, which are equivalent to 6 percent of Greece’s gross domestic product and politically toxic to all three parties in the coalition, especially the Socialists and the smaller Democratic Left. |
| Even if the troika signs off on them, the measures must also face a vote in the Greek Parliament, which is expected before a summit meeting of European Union leaders later next month. They are expected to pass, since the coalition has 178 of the 300 seats in Parliament, but public resentment is rising and new protests are planned. | |
| “I don’t think there will be any surprises,” said Babis Papadimitriou, a political commentator for the daily newspaper Kathimerini and Skai television, about the parliamentary vote. | “I don’t think there will be any surprises,” said Babis Papadimitriou, a political commentator for the daily newspaper Kathimerini and Skai television, about the parliamentary vote. |
| Mr. Papadimitriou said that he doubted the government would accept the troika’s demand that the government lay off public-sector employees. | Mr. Papadimitriou said that he doubted the government would accept the troika’s demand that the government lay off public-sector employees. |
| On Thursday, the Socialist leader Evangelos Venizelos said that the basic pact still needed to be finalized in detail and that “intensive political negotiations” would continue, an apparent reference to coming talks with the troika. | On Thursday, the Socialist leader Evangelos Venizelos said that the basic pact still needed to be finalized in detail and that “intensive political negotiations” would continue, an apparent reference to coming talks with the troika. |
| “We will struggle until the end to ensure that the measures are not horizontal and are the last,” Mr. Venizelos said, referring to proposals for across-the-board cuts to salaries and pensions that his party and Democratic Left have strenuously opposed. | “We will struggle until the end to ensure that the measures are not horizontal and are the last,” Mr. Venizelos said, referring to proposals for across-the-board cuts to salaries and pensions that his party and Democratic Left have strenuously opposed. |
| The head of the junior partner in the coalition, Fotis Kouvelis of the Democratic Left, emphasized that “some outstanding issues remained.” | The head of the junior partner in the coalition, Fotis Kouvelis of the Democratic Left, emphasized that “some outstanding issues remained.” |
| Thursday’s agreement emerged a day after a general strike when demonstrators marched in downtown Athens, protesting the Greek middle class’s rapid descent into poverty. | Thursday’s agreement emerged a day after a general strike when demonstrators marched in downtown Athens, protesting the Greek middle class’s rapid descent into poverty. |
| “They are not aware of the problems of social cohesion,” Mr. Venizelos said, referring to the lenders. | “They are not aware of the problems of social cohesion,” Mr. Venizelos said, referring to the lenders. |
| In a heated exchange last week, Mr. Stournaras pointed to a bullet hole in a window in the Finance Ministry and told the I.M.F.’s lead negotiator, Poul M. Thomsen, that excessive cuts to pensions could destabilize the coalition government. | |
| “You see this — this came from a bullet,” Mr. Stournaras said, aides reported. “Do you want to overthrow the government?” | “You see this — this came from a bullet,” Mr. Stournaras said, aides reported. “Do you want to overthrow the government?” |
| On Thursday, Mr. Venizelos and Mr. Kouvelis both emphasized the importance of introducing growth-boosting measures alongside the austerity package, and they said Greece should be allowed to adopt the measures over four years rather than two. | On Thursday, Mr. Venizelos and Mr. Kouvelis both emphasized the importance of introducing growth-boosting measures alongside the austerity package, and they said Greece should be allowed to adopt the measures over four years rather than two. |
| But more immediately, without the $40 billion aid package the country will not be able to meet expenses and could potentially default. Still, fears that Greece could exit the euro zone have abated — although not entirely subsided — in recent weeks after a series of measures taken by European leaders. |