Some cuts pose obstacle in negotiations

A final agreement on the makeup of the 11.5 billion euros in spending cuts demanded by the troika remained elusive following Wednesday?s coalition talks, which ended with the two junior partners objecting to immediate layoffs in the state sector and radical labor market reforms.

Following a meeting with Prime Minister Antonis Samaras, the leader of Democratic Left, Fotis Kouvelis, was the staunchest in his opposition to some of the measures, believed to include a six-day working week, increasing the retirement age to 67 and significant sackings in the civil service. ?No measures can be imposed on a society that is disintegrating,? Kouvelis said.

Both he and PASOK leader Evangelos Venizelos objected to immediate civil service layoffs.

As for the proposed labor market reforms, Kouvelis said there was ?no way? the government should accept the demands of the troika.

Venizelos noted that Greece?s labor market rules must be the same as in the rest of Europe. He reiterated his demand for Greece?s fiscal adjustment period to be extended by two years.

The Socialist leader was upbeat on the prospects for a deal. ?There is small progress every day,? he said. ?My experience tells me that we will reach a comprehensive agreement.?

Finance Minister Yannis Stournaras said he expects significant decisions regarding Greece?s future to be taken at the EU leaders? summit on October 8. He is due to meet his French counterpart Pierre Moscovici in Athens on Thursday. Moscovici told Kathimerini that his country was prepared to do ?whatever is necessary? to ensure Greece stays in the euro.

However, he also said it was of ?utmost importance? that Greece shows it is implementing structural reforms. He said this would rebuild trust and form the basis for recovery.

On the issue of another restructuring for Greece?s debt, the finance minister said France was ?concerned? about the sustainability of Greek debt and did not rule out another haircut, although he stressed the need for Athens to have regained trust.

Earlier, in his State of the Union address, European Commission President Jose Manuel Barroso also backed Greece?s membership of the eurozone. ?I truly believe that we have a chance this autumn to come to the turning point,? he said. ?If Greece banishes all doubts about its commitment to reform but also if all other countries banish all doubts about their determination to keep Greece in the euro area, we can do it.?