Lack of unity at home, among lenders dogs Greek government

Seeing the unity of his coalition government being tested and Greece’s lenders still at odds over how to manage the country’s debt, Prime Minister Antonis Samaras attempted to lift the mood on Thursday, insisting that economic recovery would be visible next year.

Speaking in Malta at a meeting of the European People’s Party, a grouping of conservative parties, Samaras said the structural and fiscal measures voted through Parliament last week would soon pay off. “Next year we will see the first signs of recovery,” he said.

Samaras’s message was in contrast to the mood within his government, where new splits have emerged following last week’s divisive vote. The prime minister’s apparent decision to revoke a law granting citizenship to second-generation immigrants continued to cause friction within the coalition yesterday. Justice Minister Antonis Roupakiotis, aligned with Democratic Left, slammed the premier’s stance. PASOK has also voiced its objections. Sources told Kathimerini that Samaras has no intention of backing down.

Also Thursday, Agricultural Minister Athanasios Tsaftaris expressed his opposition to taxation on photovoltaic installations.

Meanwhile, Greece’s lenders appeared equally divided over how to fund Athens’s financing gap for the next four years, which is expected to reach about 32 billion euros, and how to make its debt sustainable.

“By 2020, we want to see Greece’s debt at 120 percent of GDP,” said International Monetary Fund spokesman William Murray, indicating that the organization is not willing to concede ground to the eurozone, which wants the target to be shifted to 2022.

German Chancellor Angela Merkel again ruled out an official sector debt haircut after talks with French Prime Minister Jean-Marc Ayrault

“Of course we did not talk about debt haircuts, you know our view and that has not changed, nor should it,» Merkel said.

However, Italian Finance Minister Vittorio Grilli said no “specific option” had been excluded and European Central Bank governing council member Luc Coene of Belgium said a partial writedown of Greek debt was inevitable.

In an interview with the Financial Times, French Finance Minister Pierre Moscovici said that «all parameters are on the table» in response to a question about what measures would be used to tackle Greece’s debt.

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