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Europe
Greek PM seeks more time for austerity
Samaras set to meet head of eurozone to persuade him that his country needs more time to carry out reforms for bailout.
Last Modified: 22 Aug 2012 10:38
Samaras is trying to avert a crisis that could result in Greece leaving the 17-nation eurozone [EPA]

Antonis Samaras, Greece's prime minister, is to meet Jean-Claude Juncker, the head of the eurozone, to try to persuade him that his debt-laden country deserves more time to embark on austerity measures needed for a crucial bailout.

The meeting, scheduled for Wednesday in the capital Athens, comes amid fears that Greece's cash coffers are running empty and that the country could exit the 17-nation eurozone without more aid.

Samaras is under pressure to convince European leaders that Greece has finally mustered the political courage to fulfill pledges under its latest bailout.

Juncker, the most influential European policymaker to visit Athens since Samaras' conservative-led government took power in June, is expected to tell Samaras firmly that Greece must carry out promised cuts if it is to secure more bailouts.

That message is likely to be hammered home when Samaras meets the German and French leaders, Angela Merkel and Francois Hollande, on Friday and Saturday respectively.

Just days after taking office, Samaras promised he would embark on a European tour to seek two more years to hit targets under Greece's $161bn bailout from the European Union, the International Monetary Fund and the European Central Bank.

But as a difficult bankruptcy without further bailouts looms, the government has toned down its rhetoric on the issue and now expects to only broach the idea during talks this week rather than formally requesting it.

Germany, the biggest funder of the European Central Bank (ECB) and where patience over Greece has worn thin, has already said it will not soften its demands from the twice-bailed out country.

Massive protests

Greece must push through cuts over the next two years as demanded under the bailout if it is to win the confidence of the lenders.

But Samaras' administration has yet to fully piece together the plan after weeks of wrangling.
 
Samaras and his moderate leftist and Socialist allies have broadly agreed on the measures, although the government is still struggling to nail down the final cuts.

The planned austerity measures have triggered massive protests as they seek to slash pensions and put civil servants in a so-called labour reserve before laying them off.

"We are trying to find the best possible mix and a fair distribution of pensions. We also have to protect those getting very low pensions," a finance ministry official said.

"A second issue we continue to work on is the labour reserve."
  
Because salary and pension cuts will lead to lower tax revenues, the government will have to find $16.8bn in nominal savings to achieve its $14bn target, the official said. Parties have identified $13bn in cuts so far.

The measures will be presented for approval to the troika of the EU, ECB and IMF lenders due back in Athens early next month for a final verdict on whether to keep money flowing to Greece.

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Source:
Agencies
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