Greece readies plan for 13.5 bln in cuts ahead of Samaras trip to Berlin

The coalition government will present its finalized plan for cutting public spending by 11.5 billion euros over the next two years shortly before the troika returns next month, Finance Minister Yannis Stournaras said on Monday after talks with Prime Minister Antonis Samaras, who will attempt to convince European leaders this week that Greece is committed to moving forward with its fiscal adjustment program.

Kathimerini understands that the package of cuts presented to Samaras yesterday amounted to 13.5 billion euros, rather than the 11.5 billion demanded by the troika. This is because the Finance Ministry has calculated that once the pension and salary cuts are implemented along with the reductions to spending, tax revenues and social security contributions will fall by about 2 billion euros, leading to a new shortfall.

Sources said the Labor Ministry put forward cuts worth 5.2 billion euros to pensions and welfare payments in order to be sure that it would secure savings of 4.6 billion.

The reductions to pensions will affect those retirees who earn 800 euros or more per month but in a bid to save more money, the minimum number of years of work needed in order to qualify for the minimum pensions of 485 euros could also be increased. Currently 15 years? worth of work is needed. This may rise to 20 years.

Stournaras refused to be drawn on the issue of a labor reserve for civil servants, amid reports that 30,000 to 40,000 public sector employees would be removed from their posts and given up to 75 percent of their salaries for between one and three years. The finance minister suggested that the details of the scheme had not been finalized yet.

Samaras will be hoping to present the measures as a sign of his government?s decisiveness to stick to the troika program when he meets Eurogroup chief Jean-Claude Juncker tomorrow, German Chancellor Angela Merkel on Friday and French President Francois Hollande on Saturday.

Opinion in Germany on Greece?s future in the eurozone remains mixed. European Central Bank executive board member Joerg Asmussen said a Greek euro exit would be ?manageable? but much more expensive than some people believe.

Foreign Minister Dimitris Avramopoulos was able to gauge reaction in Berlin when he met there with his counterpart Guido Westerwelle on Monday. After the talks, Westerwelle said Greece needs to carry out the reforms that have already been agreed upon, but that ?the German government wants us to remain together in the eurozone.?

He pledged Germany?s help in implementing the reforms, but said ?the key to success lies in Athens.?

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