Coalition leaders agree on some cuts for 2013/14, no new measures this year

Greece?s coalition leaders have agreed on some of the 11.5 billion euros of cuts being demanded by the country?s lenders and that no more additional fiscal measures would be needed this year.

Prime Minister Antonis Samaras held a meeting lasting almost four hours with PASOK leader Evangelos Venizelos and Democratic Left chief Fotis Kouvelis after Finance Minister Yannis Stournaras held two days of talks with ministers to discuss spending cuts.

Stournaras briefed the three leaders on where the savings would be made. Sources said that about 7.5 of the 11.5 billion euros have been identified.

After leaving the meeting, Stournaras said the leaders agreed on the cuts and talks would continue in order to pinpoint further savings.

Venizelos and Kouvelis made statements after their talks with Samaras and indicated that there had been broad agreement among the leaders.

The PASOK chief said they agreed that Greece would have to ask for an extension to its fiscal adjustment period, that a new mid-term fiscal plan would have to be drawn up to act as a basis for the 2013 budget and that structural reforms, including privatizations, would have to be speeded up.

Greece has to make 3 billion euros of savings by the end of the year, based on its agreement with the troika early this year. Venizelos said that no more fiscal measures would be taken beyond this, following rumors that another 2 billion euros of cuts were being demanded.

Venizelos added that the three leaders concurred that there should be no ?horizontal measures,? in other words no across-the-board cuts or tax hikes, in the 2013/14 package.

The PASOK leader also seems to have succeeded in his attempt to convince his counterparts of the need to form a national negotiating team to deal with issues relating to the bailout. Venizelos said that a panel called the National Committee for Economic Planning would be formed to take on the matter.

In his brief statement, Kouvelis stressed that steps were being made to ease the impact on the country?s poorest families. He said that they would receive some kind of support when tax on heating oil is raised to match levies on other forms of fuel later this year.

Like Venizelos, Kouvelis emphasized the need for some of the money of Greece?s future loan tranches to go towards boosting the economy, particularly by settling state arrears of almost 7 billion euros to businesses and individuals.

Representatives of the European Commission, the European Central Bank and the International Monetary Fund are due to hold talks with the Greek government on July 26 to discuss the country?s program and cuts for the next two years.

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