Greece in ‘difficult’ talks with debt troika

Greece’s finance minister has described talks with a troika visiting debt inspectors as “difficult”, but said the government was trying to convince its lenders that its proposals were the right ones.

Yannis Stournaras on Monday was referring to 11.5bn euros ($14.7bn) in spending cuts that the government would have to impose to win more aid from its lenders and avoid bankruptcy.

Representatives from the the European Commission, the European Central Bank and the International Monetary Fund were seen leaving one hour after arriving for a meeting with Stournaras and Greece’s prime minister.

The leaders of the three parties in Greece’s coalition government failed on Sunday to agree on the cuts – a raft of measures the prime minister had said was crucial to restoring the country’s financial credibility and sustaining its bailout funding.

Bailout

The cuts are required for the release of a long-delayed 31bn euro ($39.7bn) loan installment from the EU and IMF.

Greece has seen its economy shrink by about 20 per cent and the unemployment rate soar to 24.4 per cent in June.

“The measures are difficult,” Stournaras added after the meeting. “We are trying to convince them [the troika] that our arguments are correct.”

The troika mission has come to resume the audit it started at the end of July, monitoring the indebted country’s progress regarding the implementation of reforms that are part of its bailout deal.

Facing its fifth year of continuous recession, Greece is hoping for some “breathing space” that will give additional time to carry out the new painful measures.

The cuts are reported to include slashing pensions by 3.5bn euros, health cuts worth 1.47bn euros as well as a 517m euro reduction in defence spending.

The proposed cuts have caused friction within Samaras’ three-party coalition government, whose leaders failed to reach an agreement on the package at a meeting late on Sunday.

‘Limit reached’

“We have not finished the plan because the troika has not accepted all of the Greek proposals,” Evangelos Venizelos, leader of the PASOK socialist party, said after the talks.

“Europeans need to understand that the Greek people cannot take any more,” Fotis Kouvelis, head of moderate leftists Democratic Left, said.

Venizelos added that disagreements focused on the proposed cuts to pensions and social benefits.

The three leaders are scheduled to have another meeting on Wednesday.

The proposed austerity programme has already caused public protests, with more than 12,000 people marching on Saturday in the northern city of Thessaloniki according to the police.

Samaras is scheduled to hold talks with European Central Bank chief Mario Draghi in Frankfurt on Tuesday, as part of a round of talks with European leaders to plead the country’s case to spread out the spending cuts.

Samaras held talks with German Chancellor Angela Merkel and French President Francois Hollande last month.