As crucial talks loom between government officials and envoys representing Greece’s foreign creditors, Prime Minister Antonis Samaras on Friday appealed for the timely release of a crucial tranche of rescue funding, on which the country’s solvency relies, following talks with European Council President Herman Van Rompuy.
Van Rompuy emphasized that the future of Greece was within the eurozone but stressed that economic reforms must move forward “to break the monopolies and narrow interests” that were hindering economic recovery. “I have no doubt that as long as Greece remains committed to the euro, its partners will continue to support it,” Van Rompuy told a joint press conference with Samaras. The premier, for his part, said the government was “committed to dealing with our fiscal problem” but that rising unemployment and an unprecedented recession posed barriers.
Van Rompuy was not the only European official to comment on Greece Friday. German Chancellor Angela Merkel also emphasized the importance of Greece moving ahead with reforms.
The country’s economic reform progress is to be assessed by officials of the European Commission, European Central Bank and International Monetary Fund, or the troika, who returned to Athens Friday and are to compile the report that will determine whether or not Greece will receive a 31.5-billion-euro tranche of rescue funding.
The envoys are to discuss the content of an 11.5-billion-euro austerity package for 2013 and 2014 with Finance Minister Yannis Stournaras on Sunday at 4 p.m. According to sources, troika officials have rejected 2 billion euros’ worth of measures included in the draft proposal which foresees cuts to pensions, social benefits and state spending.
Meanwhile, the premier’s coalition partners are insisting that some of the more onerous terms of the blueprint should be replaced by less harsh measures. Four members of socialist PASOK sent a letter to Stournaras, calling for proposed cuts to low-level pensions, civil servants’ salaries and disability benefits to be taken off the table of negotiations. The letter also claimed that foreign creditors had underestimated the revenue of Greece’s social security organizations by around 1.5 billion euros and called for this amount to be subtracted from the package of measures. The letter emphasized that Greece’s request for a two-year extension of its fiscal adjustment period should be raised again at the European Council summit on October 18 “at the latest.”
As for Democratic Left, a spokesman said the party had submitted proposals for 4 billion euros in alternative measures. These include the postponement of payment for defense procurements and further health spending instead of cuts to low-level pensions and social benefits.
Samaras is to meet with his coalition partners at 7 p.m. Sunday to brief them on the progress of talks with the troika on the blueprint.
On Saturday the premier has other concerns -- he must conduct a lightning visit to Thessaloniki, where he is to inaugurate the annual international trade fair, though he will not stay for the traditional economic policy speech. Some 3,500 police are on standby in the northern port city as several labor unions have planned anti-austerity rallies.