NEWS

Hopes for bailout renegotiation tempered in Brussels

Greece lowered expectations on Thursday about any substantial reworking of the terms of its bailout — with Prime Minister Antonis Samaras insisting the government would meet its targets as long as some ?modifications? are made — as European Union leaders gathered in Brussels.

In presenting its policy program over the weekend, the coalition government suggested substantial changes to the targets. The three parties agreed to ask Greece?s lenders for two more years, up to 2016, to bring the public deficit under 3 percent of gross domestic product. This would prevent the government having to make further cuts to wages, pensions and the public investment program. The coalition said it would ask for permission to extend unemployment benefits from one year to two and to reduce value-added tax for food catering to 13 percent from 23.

However, sources told Kathimeirni that the government aims to meet these targets over its full four-year term, rather than immediately, as it is aware there is little appetite among eurozone leaders for making concessions to Greece.

Speaking at a meeting of the European People?s Party on Thursday, German Chancellor Angela Merkel separated Greece from two other bailout countries, Ireland and Portugal, which she said are ?making progress.?

Athens?s concerns about the lack of patience with Greece among eurozone countries were reflected in a letter by Prime Minister Antonis Samaras passed on to the other leaders at the summit by President Karolos Papoulias, who stood in for the premier as he was unable to travel after his eye surgery.

?The new government of Greece accepts ownership of the adjustment program and is fully committed to its targets, its objectives and all its key policies,? Samaras said in his letter.

The premier pledged to speed up some aspects of the program, such as the stalled privatization scheme, but added that Greece would need some leeway due to the state of its economy.

?There is a question of some necessary modifications to the program in order to control unprecedented unemployment and halt the devastating recession Greece is going through for a fifth consecutive year,? added Samaras.

The point was driven home by Alternate Finance Minister Christos Staikouras, who was accompanying Papoulias to Brussels. He told the Wall Street Journal that the recession would reach 6.7 percent this year rather than a projected 1 percent growth rate. ?This means that something has to change,? he said.