Leaders to take fresh stab at cuts package

Prime Minister Antonis Samaras is to meet on Thursday morning his coalition partners, Evangelos Venizelos of PASOK and Fotis Kouvelis of Democratic Left (DIMAR), to finalize a package of some 11.5 billion euros in spending cuts, including savings from an increase in the retirement age and the firing of 15,000 civil servants, and another 2 billion euros? worth of tax measures.

The meeting will take place in the wake of an anti-austerity protest that saw some 50,000 people march through Athens. Some demonstrators clashed with police during the march, leading to more than 100 people being detained, but the event was largely peaceful.

The demonstration will add to the tension between the three leaders after they failed to agree on the package last week and the coalition fell short of concluding a deal with the troika, whose officials are due back in Athens on Sunday. Sources said that the government has given up hope of an agreement being reached in time for eurozone finance ministers meeting on October 8 so they can decide whether to release Greece?s next loan tranche. Some within the government are concerned that there won?t be a decision at the European Union leaders? summit on October 18.

Sources close to the prime minister said that the government is still hoping to conclude talks with the troika by the middle of next week so it can subsequently submit the measures to Parliament with the aim of the vote being completed by October 8. However, there is the option of waiting until after the Eurogroup meeting to hold the vote in Parliament.

Finance Minister Yannis Stournaras briefed PASOK and DIMAR on Wednesday on the content. Stournaras is planning to implement 7.5 billion euros of cuts next year, with the rest coming in 2014 or spread over a longer period if Greece is granted an extension to its consolidation period.

DIMAR?s economic policy spokesman Dimitris Chatzisokratis said that his party objected to some of the measures in the package, such as the civil service sackings and raising the minimum number of working years needed for retirement from 15 to 20. The leftist party is also concerned at plans to cut farmers? low-level pensions by 30 euros per month.

DIMAR?s opposition means that it is unlikely that the coalition leaders will agree on the final version of the package on Thursday.

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