Talks on Greece bailout to resume
Finance minister to meet on Monday so-called "troika" to discuss $40bn cash injection for battered economy.
Last Modified: 01 Oct 2012 13:34
Greek police clashed with rioters in downtown Athens last week during a 24-hour general strike [Reuters]

Greece's finance minister will meet in Athens on Monday the so-called "troika" of international creditors to discuss a $40bn cash injection.

The Greek government needs the cash, which is part of a larger bailout scheme, to avert bankruptcy and a possible exit from the eurozone.

Yannis Stournaras has already said the coalition government has agreed on the main points of an austerity package, a precondition for the loan.

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In comments to the centre-left weekly newspaper To Vima on Sunday, prime minister Antonis Samaras said his nation's financial system was desperate for a cash injection. 

"The Greek economy awaits this money like the parched earth awaits the rain," he told the newspaper, and said the lack of credit was threatening even healthy businesses with closure.

Senior representatives from the European Union, the International Monetary Fund and the European Central Bank - the "troika" - returned to Athens on Sunday before the meeting.

The trio had given Samaras's coalition government a week to finalise the austerity package, worth 13.5bn euros ($17.5bn), in order to unlock 31.5bn euros in frozen loans from the EU and IMF.

The measures "must be finalised and voted on within a few days ... there can be no delay," said Samaras, who has just completed his first 100 days heading an alliance between the socialists and the moderate left.

'Things are going to get better'

The support funds, part of a Greek bailout worth 130bn euros overall, had been suspended in May when reforms halted amid political turmoil. Greece needed two legislative elections before a government could be formed.

Samaras is trying to overcome resistance from his socialist and moderate leftist allies in government, who have balked at imposing sweeping new cuts on a nation already slogging through a third year of austerity. 

Budget cuts target Greece's most vulnerable

They have urged the conservative prime minister to extract as many concessions as possible from the troika.

In particular, they want a two-year extension to 2016 to ease out the fiscal overhaul, which socialist leader Evangelos Venizelos, one of the three coalition partners, said was important to reduce the impact of the measures.

After weeks of abortive talks, Stournaras on Friday said the coalition had agreed to the main points of the austerity package, which now required the approval of the troika and of Greece's EU peers.

Samaras told To Vima he was optimistic the EU would approve the plan, and several German news outlets said on Saturday Europe would give the green light to release the extra cash. "Things are going to get better," Samaras said.

Eurozone finance ministers are meeting on October 8, and an EU summit on October 18 and 19 is expected to decide on the Greek request for the two-year extension, which EU and IMF officials say may require extra funding.

Pension and benefit cuts

According to a Greek finance ministry source, the package includes seven billion euros in cuts affecting pensions, benefits and the salaries of better-paid civil servants such as judges, professors and police officers.

Another 3.5bn euros is to be saved from organisational reforms and early retirement for 15,000 civil servants, and 3bn euros is to be raised in additional taxes.

After two years of austerity, nearly one in four Greeks is unemployed, according to official figures [AFP]

The package was presented by the head of Greece's financial experts team, Panos Tsakloglou, at a euro working group meeting in Brussels on Thursday, the finance ministry source told AFP.

It is to be submitted alongside the draft 2013 budget to parliament on Monday.

Doctors, lawyers, journalists, teachers and even state security staff have staged strikes and walkouts this month against the new measures.

After two years of austerity, nearly one in four Greeks is unemployed according to official figures, which unions say only give a partial picture.

On Wednesday, police clashed with masked youths in Athens during a general strike and demonstrations that drew about 34,000 people to the city centre. Another 18,000 people protested in the northern city of Thessaloniki according to police.


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