In Brussels, Samaras says no austerity to cover fiscal gap

After meeting top European Union officials in Brussels on Tuesday, Prime Minister Antonis Samaras repeated in front of them the claim he had already made in Greece that his government would not adopt any new austerity measures to cover a fiscal gap in 2015 and 2016.

Speaking after a meeting with European Commission President Jose Manuel Barroso, Samaras said any savings would come from structural changes and that the fiscal shortfall would be as small as 2.5 billion euros rather than the 4 billion forecast by the troika.

“Whatever gap emerges for 2014 and 2015 will be covered by structural changes that will have a positive impact on public finances, not through new [austerity] measures,” said Samaras, who had traveled to Brussels ahead of Greece assuming the rotating EU presidency in January but apparently with a mission to leave EU leaders in no doubt about the inability of his government to adopt more wage cuts and tax hikes.

“Greece has the biggest cyclically adjusted and structural deficits in Europe and is close to a primary surplus,” he said after meeting European Parliament President Martin Schulz and European Council chief Herman Van Rompuy, as well as Barroso.

“I know that the Greek citizens are operating in extremely challenging and difficult circumstances, but I believe now we can say there is light at the end of the tunnel,” said the Commission president.

Samaras also met with Competition Commissioner Joaquin Almunia to discuss the fate of state firms Larco, EAS and ELVO. Sources said Almunia was open to the idea of mining firm Larco continuing its operations in some form and for part of Hellenic Defense Systems (EAS) to be saved from liquidation.

Also in Brussels, European Commissioner for Employment Laszlo Andor suggested that Greece did not need a third bailout. At an event discussing austerity and European solidarity, he called for Athens to be given debt relief. “What Greece needs today is not a third bailout, but a proper reconstruction plan, which inevitably starts with a significant debt relief and continues with programs that bring fresh investment,” he said in a substantial departure from the commonly held position in Brussels and the eurozone.

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