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Greece meets 'troika' over bailout revisions
Athens opens talks with European Central Bank, European Commission and IMF to adjust terms of two bailouts worth $300bn.
Last Modified: 05 Jul 2012 12:55
Sweden's Finance Minister says Greece must change its ways, or head for bankruptcy [EPA]

Greece's new finance minister Yannis Stournaras has opened his first meeting with the country's international debt inspectors, shortly after being sworn in to office.

Stournaras' televised swearing in ceremony at the presidential mansion on Thrusday was the first time Prime Minister Antonis Samaras appeared in public since undergoing eye surgery nearly two weeks ago, shortly after forming a coalition government  following inconclusive national elections.

Stournaras, a prominent economist, was meeting with the debt inspectors from the European Central Bank, European Commission and International Monetary Fund (IMF), known as the "troika". He was appointed last week after the initially designated finance minister couldn't take up his position on health grounds.

The troika officials are also to meet with Samaras later in the day.

The inspection visit is the first for a number of months given the political turmoil in Greece, sparked by the vicious financial crisis that has left the country dependent on billions of dollars worth of international bailout loans from other European countries using the euro, and the IMF.

In return, Greece has imposed stringent austerity measures, including big cuts to salaries and pensions, and higher taxes.

Despite the measures, Athens has struggled to meet the fiscal targets set out in its rescue loan agreements.

Austerity impact

In an interview with Swedish Radio Thursday, Sweden's Finance Minister Anders Borg said that unless Greece changes its ways, the country is headed for bankruptcy.

"The way the situation has been handled so far, and with the high debt levels they have it can't be ruled out that it will all finally end in a bankruptcy.''

He also said the country might have to consider exiting the eurozone, which his own country is not a member of.

"I'm more unsure about that, but it is obvious that if you have such a high debt, you only have grim alternatives to choose between,'' he said.

Greece's financial woes exploded onto the international scene in late 2009 after the newly elected PASOK government at the time said the previous conservative administration had falsified financial data and that the deficit was far higher than thought.

Angered by the austerity that has left the country mired in a fifth year of a deep recession and sent unemployment spiraling up to 22 per cent, a large number of voters backed anti-bailout parties in the country's May 6 and June 17 elections.

Neither election produced a winner with enough votes to form a government alone.

Revising the terms

While no statements have yet come out of the meetings, the three-party coalition Samaras formed with the socialist PASOK party and the small Democratic Left is seeking to amend terms of the current bailout agreement, while insisting that it will stick with the general thrust of the financial rescue plan.

The current coalition represents the last remaining part of the Greek political system that still supports the austerity measures the country took on in 2010. 

Ahead of the government's policy statement, which Samaras is to present in Parliament Friday evening, the coalition has said it advocates freezing public sector layoffs and repealing some of the tax hikes imposed over the past two years.

But whether Greece can revise the terms of its two bailouts, worth a total of $300bn, will depend on how the proposals are viewed by its creditors.

Germany, the largest single contributor to the bailouts, has repeatedly said that Athens must stick to its commitments. 

Two deputy ministers Konstantinos Tsiaras for foreign affairs and Simos Kedikoglou as deputy minister to the prime minister were also sworn in along with Stournaras.

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Source:
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