Stournaras grinding out new cuts as talks with ministers continue

Finance Minister Yannis Stournaras is due to continue talks with cabinet colleagues on Tuesday after they failed on Monday to agree on the details of the cuts that need to be made for the next two years to satisfy Greece?s lenders.

Stournaras is looking for 11.5 billion euros in savings for 2013 and 2014 but was unable to hit this target following talks with several ministers. The finance minister is expected to finalize the details with department chiefs Tuesday before meeting Prime Minister Antonis Samaras, who will hold talks with fellow coalition leaders, Evangelos Venizelos of PASOK and Fotis Kouvelis of Democratic Left, Wednesday.

Samaras is also due to meet some of the ministers on Tuesday in a bid to overcome resistance to some of the cuts to their department budgets.

One of those who will meet with the premier is Interior Minister Evripidis Styliandis. He is concerned that funding for local authorities will be reduced further. Compared to 2009, central government funding for municipalities has been slashed by 62 percent. There are concerns within the ministry that more cuts could lead to basic services such as nursery schools being scrapped.

Defense Minister Panos Panayiotopoulos saw Samaras Monday, when the pair discussed the possibility of avoiding cuts to the so-called ?special salaries? received by military personnel. The government is reluctant to reduce the above-average wages in the armed forces.

Further savings must be found in the health sector, where Minister Andreas Lykourentzos presented plans for the merger of some organizations but the reduction of costs was well short of the target for his department. There is also pressure on Labor Minister Yiannis Vroutsis to produce 5 billion euros in savings, 3 billion from benefits and 2 billion from pensions.

Stournaras is due to receive a report today by the Center of Planning and Economic Research (KEPE) that will outline where savings could come from. Kathimerini understands that among the proposals are to limit basic and supplementary pensions to a total of less than 2,400 euros per month, which will save 1.5 billion euros, after the drop in tax revenues is factored in. There are also plans to save 1.5 billion euros from general government spending, which includes stopping pensions for the orphaned, singled or divorced daughters of deceased judges and military officers, which would save 220 million euros, and reducing MPs pensions by 20 percent to save almost 6 million.

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