Greek PM to focus on reforms, coalition unity

After a brief break for the August 15 public holiday, Prime Minister Antonis Samaras and his key cabinet ministers are reportedly preparing for their return to work in earnest next week when economic reform efforts are to resume and the two parties in the ruling coalition must seek to quell internal opposition to plans for new austerity measures.

According to sources, Samaras is focusing on three key areas: tying up loose ends regarding Greece’s commitments to its troika of international lenders, boosting the country’s international image, and curbing internal dissent in the fragile government, especially ahead of elections scheduled for September 22 in Germany, which has paid the largest share of Greece’s multi-billion-euro rescue packages in exchange for tough fiscal adjustment measures.

Launching the last leg of her re-election campaign on Wednesday, German Chancellor Angela Merkel issued an indirect message of support for Greece’s reform efforts, telling German voters that Athens should be cut some slack in meeting reform targets.

“We need to give Greece a little time so that things can develop a bit,” Merkel said. She said recent developments, including Greece’s posting of a primary surplus for the first half of the year, were encouraging, but defended her austerity policies, claiming that they were the only way to tackle a broader crisis in the eurozone.

On his return to the Maximos Mansion next week, Samaras is likely to seek a balance between pushing forward with tough reforms and quelling objections among coalition MPs to plans for new painful measures, such as the repossessions initiative, which has drawn angry protests from many prominent MPs in his own conservative New Democracy.

As the moratorium is not due to be lifted until December 31, government officials believe there is enough time for negotiations within the two ruling parties to win round skeptics.

Of more immediate concern are planned reforms in the health and education sectors as well as a broader civil service overhaul. The government must be in a position to show the troika next month that the transfer of thousands of civil servants into a mobility scheme, where staff receive reduced wages for eight months ahead of their transfer to another civil service job or dismissal, is progressing smoothly.