Greece, lenders agree on 325 million euro savings: sources

Reuters News
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Posted: Feb 16, 2012 11:00 AM
Greece, lenders agree on 325 million euro savings: sources

ATHENS (Reuters) - Greece and its international lenders have agreed on how to achieve budget cuts worth 325 million euros this year, one of their last demands in return for sealing a 130-billion euro rescue, Greek government sources said on Thursday.

The cuts were the last set of austerity measures that remained to be specified, out of a 3.3 billion euro savings package required by the European Union and the International Monetary Fund to continue bankrolling Greece.

Greek political leaders had failed to agree on the package last week, mainly because they were striving to avoid even deeper pension cuts in a harsh austerity program approved by parliament early on Monday.

"One hundred million euros will come from a cut in the operating expenses of the defense ministry and about 90 million euros by cutting some public sector wages earlier than scheduled," one government source told Reuters on condition of anonymity.

"The remaining 135 million euros will come from additional cuts in the operating expenses of ministries for the interior, health and labor. The labor ministry savings may relate to pension cuts," the government official said. One other government source confirmed the breakdown.

Greece hopes that the Eurogroup of euro zone finance ministers will approve the bailout on Monday after months of often ill-tempered negotiations.

(Reporting by Lefteris Papadimas; writing by Harry Papachristou; editing by David Stamp)