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.