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Tags: greek | leaders | creditors | cuts

Greek Leaders Agree to Most of Creditors' Proposed Cuts

Sunday, 29 July 2012 04:17 PM EDT

Political leaders in Greece have agreed on most of the austerity measures demanded by its creditors and are now eyeing pension and wage cuts to find the final 1.5 billion euros of savings still needed, a source close to the talks said on Sunday.

Greece must find savings worth 11.5 billion euros for 2013 and 2014 to satisfy its increasingly impatient lenders, who are currently visiting Athens to evaluate the country's progress in complying with the terms of its latest bailout.

A finance ministry source said the lenders, who were due to leave Athens at the end of July, would now stay until the savings plan was nailed down.

"We want to help and we will stay as long as it takes and until the plan is finalized," IMF mission chief Poul Thomsen has told the Greek finance minister, according to a Greek official.

Prime Minister Antonis Samaras's government last week managed to draw up a list of measures to achieve those savings, but the three parties in his conservative-led administration failed to agree on them, and are due to resume talks on Monday.

"The political leaders don't disagree on anything, there are just alternative proposals being discussed to protect those with low pensions or incomes in the public sector," said the source, who is involved in the talks. "We need measures worth 1.5 billion euros to finalise the 11.5 billion euro package."

Near-bankrupt Greece is fighting an increasingly desperate battle to convince skeptical European Union and International Monetary Fund lenders it has turned over a new leaf and is ready to push through long-delayed reforms to overhaul its recession-hit economy.

But the lenders have so far appeared far from convinced, and officials have told Reuters Greece is likely to require a new debt restructuring that the euro zone - faced with market turmoil in Italy and Spain as well - can ill afford.

Greek media have reported that the country's leaders are discussing possible layoffs of contractors in the public sector, a cap on pensions, cuts in welfare benefits, reductions in tax exemptions, and lower salaries for public employees as well as raising the retirement age by a year to make up the shortfall in savings.



A decision on a new tranche of aid for Greece is not expected until September, and the country's already dire financial position appears to be getting increasingly precarious.

"The fact that we have not received the agreed aid instalments has put pressure on our cash reserves. Until then, we are taking extra care in managing our cash," Deputy Finance Minister Christos Staikouras told Real News weekly.

The troika of EU, European Central Bank and IMF lenders, whose departure date is now uncertain, is due to return in September to complete its assessment of whether Greece deserves more aid.

A fifth year of recession, record unemployment, and repeated waves of austerity cuts have fuelled growing anger towards the troika and the austerity medicine it has insisted on.

Summing up the dark public mood, the GSEE union lambasted the troika after talks with it on Friday for heaping misery on Greeks.

"We agreed on one thing - that we disagree on everything," GSEE leader Yannis Panagopoulos said in a statement. "The troika men came to Greece as doctors and prescribed the medicine that would save the Greek economy and people, but in the end they proved to be charlatans."

© 2022 Thomson/Reuters. All rights reserved.

Sunday, 29 July 2012 04:17 PM
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