NEWS

Focus shifts to aid talks

As creditors seek compromise on Greece, PM pushes prior actions, coalition unity

With a crucial Eurogroup summit due to take place in Brussels on Tuesday, when Greece hopes to get at least initial approval for the release of vital rescue funding, Prime Minister Antonis Samaras has been focusing on projecting a united front to the country’s foreign creditors despite continuing upheaval within his coalition.

The approval of new aid –- likely to comprise three instalments “bundled” into a 44-billion-euro loan rather than the 31.5 billion euros originally anticipated –- remains the top priority for Samaras. But sources indicated that a final decision on new funding is unlikely to be taken until the end of this month due to an ongoing dispute between the International Monetary Fund and Germany regarding the funding gap created by a two-year extension granted to Greece to achieve fiscal adjustment targets and over how the country’s huge debt can be made sustainable.

The IMF continues to favor some kind of new haircut to Greek debt, a prospect opposed by Berlin. Once a decision is reached, it must be approved by the other 16 eurozone states, which will take at least a week.

On Saturday, Eurogroup Chairman Jean-Claude Juncker, one of the most consistent defender’s of Greece’s reform efforts, said that EU and IMF officials were “working intensively on a compromise on Greece and are making progress.” He also slammed Austrian officials for suggesting that a Greek eurozone exit was looming. “We must show solidarity with Greece and watch our words,” Juncker said.

In the meantime Samaras wants his ministers to proceed with the “prior actions” demanded by the troika, including an overhaul of the tax system, the creation of a committee to oversee the budget execution and the acceleration of privatizations.

As for a government reshuffle expected in coming weeks, Samaras is said to be keen to draw in new ministers from his junior partners, PASOK and Democratic Left, in order to bolster a sense of coalition unity and ward off the specter of snap elections next spring.

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