New cuts not possible, Greek prime minister tells euro area official
Prime Minister Antonis Samaras had an opportunity on Wednesday to personally convey to the head of the Euro Working Group, Thomas Wieser, his concerns about the troika’s position regarding Greece’s fiscal and funding gaps, amid rising political anxiety over the possibility of further austerity measures.
The Greek government has grown increasingly concerned about the troika’s demands for another 2 billion euros’ worth of savings next year, its refusal to consider rolling over Greek bonds held by the European Central Bank and national central banks in the eurozone, and the decision to put off until after the European Parliament elections in May any decision on further debt relief for Greece.
Sources said that Samaras made it clear to Wieser during their meeting at the prime minister’s office in Athens that the coalition government is not in a position to adopt any further spending cuts or tax increases. Some 4 billion euros of savings have already been included in the 2014 draft budget.
Samaras and PASOK leader Evangelos Venizelos believe that having to implement another austerity package would destabilize their administration. Government officials have been pledging over the last few weeks that there would be no more measures this year or next.
The two leaders are particularly concerned that a failure to agree on further debt relief for Greece before the Euro elections would have a negative impact on the fortunes of New Democracy and PASOK at the polls and would boost the anti-bailout parties, which would be able to argue that following the troika’s demands had proved futile for the country.
Immediate concern, though, lies with the possibility of new cuts and tax hikes. Speaking to Skai TV on Wednesday, Health Minister Adonis Georgiadis suggested that Greece would be forced to hold snap elections if the government is asked to implement “horizontal” cuts. In an interview with the Athens-Macedonian News Agency, New Democracy lawmaker Dora Bakoyannis said there was “no way” such measures would receive Parliament’s approval.
Also on Wednesday, 60 ND MPs declared their opposition to the level of taxation on farmland and vacant plots of land. They were joined by 34 deputies from both ruling parties who requested in writing that Greeks who work in the tourism industry also receive unemployment benefits.
