Greece fails to agree on spending cuts

Inspectors from three international funding bodies have arrived in Greece, to see how well it is doing with its programme of cuts.

The representatives of the so-called “troika” of creditors – the International Monetary Fund, the European Central Bank and the European Commission are there to examine Greece’s economic plans.

Officials in the mediterranean nation are preparing to cut another $15bn from its annual budget – despite widespread public protests.

If the troika is satisfied with the progress, Greece is likely to ask for an extension on its existing loans.

Greek Finance Minister Yannis Stournaras held talks with the creditors in Athens on Sunday, after Prime Minister Antonis Samaras insisted that the latest package of deep spending cuts, which will once again affect wages and pensions, will be the last. He also defended the measures as necessary to restoring his country’s financial credibility.

As the meeting got under way in the finance ministry, some 200 employees of state bank Hellenic Postbank – which officials on Friday confirmed would be sold off – shouted towards the windows: “Stournaras, liar, hypocrite … Troika leave the country.”

Adoption of the latest “austerity” package is necessary for the release of a long-delayed 31 billion euro ($39bn) rescue loan instalment, without which Greece will reportedly be forced to default on its loans and may have to quit using the euro.

The new austerity measures are to be implemented across 2013 and 2014.

But with Greece now in the fifth year of a deep recession that has seen its economy shrink by about 20 per cent and the jobless rate soar to 24.4 per cent in June, people are wary of any new cuts.

“Our services are completely broken down, there is no staff and [we don’t have] the data processing and software we should have. If this continues, we won’t be able to fight tax evasion so the government can collect taxes and increase its budget,” said Dimitris Tsaopoulos, president of the Western Macedonia Tax Officials Association.

Another protester took issue with Samaras’ assertion that the austerity programme was nearly over: “These are not the last cuts. It’s all lies. Workers only hope to put an end to all this through these demonstrations.”

More protests and strikes are planned in the coming days as Greeks appear determined to show that their country can take no more spending cuts.