As Finance Ministry officials labored on with tough talks with troika officials on Thursday on an elusive 13.5-billion-euro austerity package, government officials struggled to deal with a tide of problems shaking the fragile coalition, including a burgeoning crisis within socialist PASOK.
The latest meeting between troika chiefs and Finance Minister Yannis Stournaras ended after just 45 minutes amid reports that the two sides had failed to agree on where some 2.5 billion euros of spending cuts should come from. Stournaras said his aim remained to reach a basic agreement before a Eurogroup summit on Monday.
Meanwhile a crisis was growing within PASOK following criticism from the leftist SYRIZA opposition but also from within the party against PASOK leader Evangelos Venizelos regarding his handling of a memory stick containing the names of some 2,000 Greeks being probed for tax evasion.
Venizelos defended his actions in a speech to his MPs during which he stressed that austerity measures could only be voted on in Parliament when a comprehensive package is agreed including an extension to Greece?s fiscal adjustment period.
Another headache for the government was an unprecedented breach of security at the Defense Ministry by shipyard workers. The incident is said to have caused consternation among officials close to Prime Minister Antonis Samaras, who was in Paris for a conference organized by the International Herald Tribune.
Addressing the event, Samaras said a Greek euro exit would slash living standards by up to 70 percent and would be ?disastrous? for the bloc. He said his government was ?changing Greece at home and rebranding it abroad.? But the messages from EU leaders on Thursday were not encouraging. German Finance Minister Wolfgang Schaeuble said all eurozone states with debt problems had made good progress with reforms apart from Greece, ?which is in a particularly difficult situation.? He added however that countries with problems should be given more time to reform.
Meanwhile European Central Bank chief Mario Draghi ruled out the prospect of rolling over Greek debt, saying that would constitute monetary financing, which is against the ECB?s policy. Speaking later at the IHT conference, Samaras had said it would be ?very positive? if the ECB rolled over Greek bonds.