By Agencies

Share Link:

Greece's coalition government reached a "basic agreement" on a new round of austerity cuts demanded by its international lenders.

The measures, secured on Thursday by the country's three coalition parties after weeks of fruitless efforts, had to be agreed upon or Greece would have been cut off from vital bailout loans that it needs to pay its way and keep it in the 17 country group that uses the euro.

Finance Minister Yiannis Stournaras said the long-delayed agreement placed him in a stronger negotiating position ahead of talks Monday with representatives of the country's bailout creditors, who will have the final word on the cutbacks.

He said Prime Minister Antonis Samaras' deliberations with the heads of his two junior coalition partners resulted in "a basic agreement" on the measures intended to cut some $14.8bn off state spending in 2013-14.

The deal comes the day after 50,000 anti-austerity protesters took to the streets of Athens.

Greece has relied on international bailouts since May 2010. In return, it imposed a punishing austerity program, repeatedly slashing incomes, hiking taxes and raising retirement ages.

The new measures are expected to include further pension and salary cuts, and raising the age of retirement from 65 to 67.

Parliament is expected to vote on the cutbacks between October 8, when eurozone finance ministers meet in Luxembourg, and the October 18-19 European Union summit.

The government should easily win the vote, despite fierce opposition from anti-austerity parties and potential dissenting votes, as it controls 178 of the house's 300 seats.