According to a senior Greek
finance ministry official Greece is close to
reaching a deal with representatives from the troika (European
Commission, the European Central Bank, and the International
Monetary Fund). The announcement means Greece is closer to securing
its next bailout package.

A draft of the austerity package includes pension cuts, welfare
payment reductions, and cuts in healthcare spending. From The
Wall Street Journal:

According to an earlier draft of the austerity program seen by
Dow Jones Newswires, the cutbacks are likely to include EUR4.8
billion worth of cuts in pension and welfare payments, a EUR1.5
billion reduction in healthcare spending, and EUR1.5 billion
slashed from the public-sector payroll, among other cuts. But,
skeptical of whether the proposed cuts would hit targets, the
troika has pressed Athens to accept an additional EUR2 billion
worth of cutbacks in pension payments and public-sector payrolls
and they are urging Greece to raise its retirement age–to 67 from
65 currently–to ease strains on the country’s deficit-laden
pension system.

Many of these measures will be very unpopular. There are already
general strikes planned for next week, and getting the leftists in
the Greek government on board will be a challenge. Greek Prime
Minister Antonis Samaras is scheduled to meet his coalition
partners on Thursday afternoon.

If the troika approves of the reforms and austerity measures
agreed by Greece’s governing parties then Greece will receive about
30 billion euros, part of a wider bailout agreement worth 173
billion euros. Without the bailout Greece will have to default on
its debt. The troika is expected to release its report on the Greek
government’s attempts at austerity later this month or the
beginning of October.

While it might be encouraging to see Greece making some effort
at implementing spending cuts these attempts are only a means to a
very expensive end, a bailout worth billions of euros.