Greece yesterday unveiled a draft budget that forecast a sixth year of recession as the Government resumed crucial talks with international creditors to access loans that have been stalled for months.

The Finance Ministry said the country was headed for a 3.8 per cent economic contraction as Prime Minister Antonis Samaras prepared to meet officials from the so-called troika of international creditors . The meetings – and a new austerity package worth €13.5 billion – are supposed to unlock €31.5 billion in frozen loans under the country’s bailout.

The Greek economy “awaits this money like parched earth awaits the rain”, Samaras told the Greek daily To Vima on Sunday.

A 90-minute meeting yesterday between Finance Minister Yannis Stournaras and senior troika representatives from the European Union, the International Monetary Fund and the European Central Bank ended without statements.

Upon arrival at the ministry, the auditors were heckled by a few dozen flag-waving members of the nationalist Independent Greeks party, which wants the Government to repudiate the national debt and throw out the creditors’ representatives.

Samaras’s coalition has sought to jump start a moribund privatisation drive and to encourage a consolidation of the country’s struggling bank sector.

France’s Credit Agricole yesterday said it was in exclusive talks to offload its Greek subsidiary Emporiki to Greece’s Alpha Bank, under terms that would see the French bank first pump more funds into the ailing lender.

The troika left Greece last week to give Samaras’s coalition Government time to finalise the austerity package, which is worth €13.5 billion.

The budget draft announced yesterday includes measures “under negotiation” worth €7.8 billion that take effect in 2013, including a €3.8-billion cut to pensions and salary reductions worth €1.1 billion.

The proposed measures also include a two-year hike to the retirement age from 65 years to 67 – for a net benefit of just five million euros.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.