NEWS

PM cagey on achieving loan goals at EU summit

Prime Minister George Papandreou gave a rather downbeat assessment on Friday of Greece?s chances of convincing its European Union counterparts that its emergency loan terms should be improved, as an updated version of the memorandum that the government signed with the European Commission, the International Monetary Fund and the European Central Bank underlined how much more work Athens has to do to meet its targets.

Speaking in Parliament after trips to Germany and Finland, during which he attempted to convince those countries? leaders that Greece should be given longer to repay its 110-billion-euro loan package and at a lower interest rate, Papandreou indicated that Greeks should not build up hopes that Athens will get the green light when EU leaders meet on March 24 and 25.

?We have a lot of battles ahead of us,? said Papandreou. ?We should not be too confident or too negative. No battle is futile, especially when our national interest is at stake. March 25 will be a crucial juncture but it is just one juncture.?

Greece hopes its request for better loan conditions will be included in a ?comprehensive package? for dealing with the eurozone?s debt crisis at the March summit. Apart from the Greek loan restructuring, the package would include increasing the effective lending capacity of the European Financial Stability Facility (EFSF) and giving it the right to buy bonds from eurozone countries or fund buybacks from heavily indebted members.

Such a deal is dependant on the other 15 members of the eurozone agreeing to the proposals put forward by Germany and France in the form of a ?competitiveness pact,? which essentially proposes later retirement ages, lower wages and tighter budget discipline.

However, a report by the European Commission that accompanied the publication of the updated memorandum on Friday, indicated that Greece has several issues to worry about beyond its loan terms. Brussels believes that the government is behind in overhauling its tax collection mechanism and setting up a system to keep a tight rein on public spending. It also accuses the government of making too many concessions in the liberalization of closed professions and of failing to put into action laws simplifying the process for setting up a business.

The EU-IMF memorandum has been updated for a third time and calls on the government to set out by next month measures that will boost public coffers by 1.8 billion euros to make up for last year?s shortfall. It also calls for measures to raise 23 billion euros between 2012 and 2015.