Greek Prime Minister George Papandreou
Source: Press TV
Despite weeks of protests against the government's austerity measures, the Greek cabinet has approved a new austerity budget plan to help ease its massive public debt.
The 2012-2015 austerity budget plan has been a key requirement from the EU and International Monetary Fund (IMF) to release the next tranche of debt funding worth 12 billion euros ($17 billion), part of a 110-billion-euro rescue package agreed on last year.
The new plan that was approved on Wednesday, is worth some EUR 28 billion and includes a privatization program aimed at raising EUR 50 billion and further budget cuts as well as tax increases.
Greece has a debt of over EUR 300 billion, which is worth more than 150 percent of its annual economic output. Moreover, the Greek Prime Minister George Papandreou had earlier this week warned that if the austerity measures were not be implemented, the country could face a “catastrophic” default.
Therefore, Greek officials had urged the EU and the IMF to hand over the bailout package before mid-July, otherwise the country would default.
There has been concerns that if Greece would default, Spain, Italy and Belgium could follow. This could then threaten the whole world.
"If there were a failure to resolve that situation, it would pose threats to the European financial systems, the global financial system and to European political unity," US Federal Reserve chief Ben Bernanke said on Wednesday, referring to the Greek debt crisis.
Unions in Greece, however, have planned a 48-hour strike to protest government's new measures
The country has witnessed massive anti-government protests which turned violent at times and left scores of protesters and security forces injured since last year when it was first bailed out by the EU and the IMF.