Greece Moves on Austerity Deal

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The Greek government appears to have agreed on a tax cut with its international lenders, hoping to get the country out of debt. But the opposition says it won't give its support for another round of austerity measures. The austerity measures are hitting households hard, with sales dropping 17 percent in the past year. Let's go to that story.

Fierce resistance in Athens to another round of austerity measures, the Greek government insists they are essential to dig the country out of debt.

Greece is trying to avoid defaulting on its billions of debt, with European officials meeting to discuss a possible second bailout for Greece.

Along with fresh austerity measures and privatizations, one of the government's latest plans is to cut the amount of value-added tax Greeks pay, in order to boost spending.

That tax cut appears to have found agreement with international lenders, but not with Greek opposition parties.

The European Union and International Monetary Fund who gave Greece its bailout want political consensus, so any deal would remain in place no matter who is in power.

But economist Gustavo Bagattini of RBC Capital Markets says greater problems still exist.

[Gustavo Bagattini, European Economist, RBC Capital Markets]:
"The problem is the original IMF/EU package envisaged Greece returning to markets next year and clearly that's not going to happen with funding costs what they are right now, so there is a shortfall. Some of that will be filled by these new measures, new fiscal measures, new privatization measures, more money will probably have to be put in there because these measures by themselves aren't sufficient."

The tax deal is still to be officially confirmed.