As government officials pressed on with efforts to push through crucial structural reforms and identify ways of achieving 11.5 billion euros in savings demanded by the country?s international creditors for the next two years, top European Union officials indicated on Friday that Greece has virtually no room for maneuver beyond the strict orders of its lenders.
With a visit by top-ranking envoys from the European Commission, European Central Bank and International Monetary Fund, known as the troika, expected on July 24, government officials are scrambling to take action and win round creditors before attempting to renegotiate the terms of the country?s debt deal and secure an extension to the fiscal adjustment period.
Prime Minister Antonis Samaras said on Friday that he would personally monitor the overhaul of the civil service, including the evaluation of personnel and slashing of red tape.
Administrative Reform Minister Antonis Manitakis said the aim was to reduce the number of civil service departments by about 30 percent.
European Regional Policy Commissioner Johannes Hahn, who was in Athens on Friday, also highlighted red tape as a problem, noting that it discouraged investors and should be tackled ?immediately.? Hahn did not rule out the prospects of flexibility being introduced to Greece?s economic program but said the fiscal targets would have to be respected, noting that the troika?s report was not expected until September.
Other EU officials were less understanding. The spokesman for German Chancellor Angela Merkel, Steffen Seibert, said the terms of Greece?s debt deal should not be changed. ?Neither the content nor the time frame of the memorandum are up for debate,? he said, adding that Greece must ?make great exertions? to continue receiving aid. Seibert refused to comment on a report in the Rheinische Post according to which Merkel regarded an extension of Greece?s fiscal adjustment period as ?unacceptable? and was prepared to offer Athens an extension of only ?a few weeks.?
The German daily also reported that Greece has failed to hit some 210 out of 300 targets.
IMF Managing Director Christine Lagarde, for her part, said it was too early to discuss changes to bailout terms, saying Greece must ?put words into actions.? Speaking to CNBC, Lagarde said it is ?way too premature to discuss extension, to discuss additional financing.?