New effort to agree cuts

Greece?s coalition leaders are due to meet for the second time in three days Wednesday in a bid to agree on the details of 11.5 billion euros in cuts, which appear to have created the first fissures in the three-party alliance.

Prime Minister Antonis Samaras, who met with troika officials Tuesday, will host PASOK?s Evangelos Venizelos and Democratic Left?s Fotis Kouvelis in the hope of overcoming the reservations that his two coalition partners have about the savings being demanded by Greece?s lenders.

Sources said that Samaras assured troika inspectors that the cuts would be agreed this week and set out in detail by next week. The premier sees this as a vital part in securing a review from the troika that will be favorable enough to ensure the release of further loans from the eurozone and the International Monetary Fund.

Venizelos and Kouvelis, however, have growing reservations about agreeing to cuts to salaries and pensions. They argue that this would exacerbate Greece?s recession and threaten the government?s viability as there would be a backlash against the measures.

Venizelos also met with the officials from the IMF, European Commission and European Central Bank Tuesday. He put forward his plan for only 6.5 billion euros of cuts to be agreed now and then implemented over the next two years. The PASOK leader suggests that the remaining savings could be made during 2015 and 2016, provided the troika agrees to extend Greece?s fiscal adjustment period for two years.

Sources said that the representatives from Brussels, Frankfurt and Washington informed Venizelos that they did not have the authority to make such changes to Greece?s program, although they did not counter the PASOK chief?s assertion that the measures could lead to an economic contraction of 4.5 percent next year. Venizelos wants Samaras to seek meetings with his eurozone counterparts to argue the point that the savings could deepen the recession.

However, Venizelos is facing opposition from within his own party. Former ministers Michalis Chrysochoidis, Andreas Loverdos and Yiannis Ragousis voiced opposition to their leader?s stance on the cuts and the amendments to a university reform law. Chrysochoidis accused Venizelos of playing ?public relations games? with the cuts.

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