Greece has ‘some way to go’ to meet spending cuts target
Greece’s finance minister yesterday said the crisis-hit country had “some way to go” to finalise €11.5 billion in spending cuts demanded by its EU-IMF creditors in return for fresh loans.
“We still have some way to go,” Yannis Stournaras told reporters after a meeting with Prime Minister Antonis Samaras and the other two party leaders backing Greece’s coalition government.
He added that the three leaders had reached agreement on the “basic guidelines” on where the $14 billion in spending cuts should be made.
Auditors from the EU, IMF and the European Central Bank – the so-called troika of Greek creditors – are expected in Athens next week for another in-depth inspection of the new government’s economic programme.
The ‘troika’s’ report will determine whether Greece will receive fresh loans of €31.5 billion by September due under its debt rescue programme.
The socialist and moderate leftist leaders backing Samaras’ government, Evangelos Venizelos and Fotis Kouvelis, said they would mobilise their contacts in Europe to argue in favour of Greece’s claim for more time.
“There will be a complete plan on our part to seek a renegotiation, with the main goal being the extension of the fiscal adjustment,” Kouvelis said.
“This will also be achieved with the search of political elements beyond the troika,” the moderate leftist said.
Venizelos, who warned this week that it was “almost impossible” for Greece to meet its fiscal targets by 2014 given its deepening recession, said Athens would work to dispel the “erroneous and unfair view” that nothing has been done so far.
“We will all operate at the highest political level, contacting our peers and the troika chiefs, to change the climate and present what Greece has done... which is a feat of fiscal adjustment,” he said.
“We don’t have much time...we need to show our credibility by speedily enacting structural changes and reforms that will make Greece a normal, functional European country,” the socialist leader said. The government says the economy could contract by 6.7 per cent in 2012 compared to an earlier forecast of 4.5 per cent, a slippage partly blamed by officials on across-the-board pay cuts and layoffs required under the terms of its EU-IMF bailout.
Greek reports said the finance minister has so far managed to locate half the required savings as other ministers have publicly stepped forward to oppose further cuts after a prior two-year austerity effort.
“If it were effective to cut off our leg or our arm, we would do so. But it is not effective,” said Justice Minister Antonis Roupakiotis, who warned that further cuts in judicial salaries is unconstitutional.
Defence Minister Panos Panagiotopoulos last week also noted that military salaries have already been cut by 37 per cent and can go no lower.
A finance ministry source on Tuesday said Athens was also in search of funds to help repay €3.1 billion in ECB-held bonds maturing on August 20.
Eurogroup chief Jean-Claude Juncker earlier this month said the ECB repayment would “not be a concern” but the details remain to be worked out.