NEWS

Coalition chiefs to meet to finalize 11.5 bn in cuts

The leaders of the three parties that form Greece?s coalition government face on Thursday the unhappy task of approving 11.5 billion euros in spending cuts over the next two years in the hope that this will help convince the country?s lenders to release further bailout funding for Athens.

Prime Minister Antonis Samaras is due to meet PASOK chief Evangelos Venizelos and Democratic Left leader Fotis Kouvelis to approve the savings, which have been drawn up by Finance Minister Yannis Stournaras after intensive discussions with his cabinet colleagues.

It is expected that apart from cuts in spending in various government departments, the measures will also include considerable reductions to state pensions, which will be one of the most politically sensitive issues for the coalition to handle, given that the three parties had committed in their election campaigns to avoiding ?horizontal? cuts. It is estimated that about 5 billion euros in savings will come from areas that fall under the Labor Ministry?s auspices, such as pensions.

Sources said that an extra 300 million would be cut from the healthcare budget to help meet the target being demanded by the European Commission, the European Central Bank and the International Monetary Fund. However, Health Minister Andreas Lykourentzos denied that spending on health would be limited to 1,500 euros per patient.

The government will also stress the importance of the privatization program in its talks with the troika. On Wednesday, former Public Power Corporation chief Takis Athanasopoulos was appointed the head of Greece?s privatization fund, TAIPED. This move, as well as the announcement of the closure of 21 public organizations, will be put forward by the coalition as evidence that Athens is taking the bailout terms seriously. ?We have to ensure that the troika delivers a favorable review,? one of Samaras?s aides told Kathimerini. ?There is no room for games.?

Stournaras is due to meet the heads of the EC, ECB and IMF team in Greece on Thursday afternoon. Samaras has a meeting with them on Friday.

First, the prime minister will hold talks with European Commission President Jose Manuel Barroso, who flew to Athens on Wednesday night. The government is hoping that Barroso?s visit will help show that Europe is standing by Greece through its difficulties. His visit is the first by any head of the three bodies that make up the troika since the bailout was agreed in May 2010.

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