Greece near austerity cuts deal
Greece hopes to obtain its lenders' approval for a new wave of austerity measures worth about €11.5 billion by the middle of next month, a Greek finance ministry source said today.
Winning approval for the savings due in 2013-14 is key to a positive review from the "troika" of the European Union, the European Central Bank and the International Monetary Fund, who are expected back in Athens next month for a verdict on whether they will keep funds flowing to the austerity-bound country.
"Our aim is to have agreed with our partners by September 14th," the senior finance ministry official told reporters. An informal Eurogroup finance ministers' meeting has also been scheduled in Nicosia for the same date.
The chiefs of the troika mission, who completed a preliminary visit to Athens earlier this month, are expected to return around September 5th, the official said.
The Greek government has so far worked out a draft list of measures worth €10.8 billion, another senior ministry official told Reuters last week.
Talks between ministers to identify the remaining €700 million were continuing today and Greece plans to wrap them up "as soon as possible", the official said.
The bulk of the measures will include cuts in pensions, public sector wages, welfare benefits and health expenses. The Greek government is also working on a plan to dismiss up to 40,000 civil servants over the next years.
Germany's Der Spiegel magazine on Saturday cited an interim troika report as saying Greece will likely need €2.5 billion in spending cuts over the next two years beyond the €11.5 billion figure to meet international lenders' demands for cutting its deficit.
Having a complete draft list of measures ready would help Greek prime minister Antonis Samaras in his effort to re-establish his country's battered credibility in meetings later this week with Eurogroup chief Jean-Claude Juncker, German chancellor Angela Merkel and French president Francois Hollande.
Mr Samaras is expected in those meetings to informally float a long-standing proposal that the measures be spread over four instead of two years to soften their impact on a Greek populace enduring record unemployment and the country's worst downturn since World War Two.
Greece is dependent on a second, €130-billion-euro rescue deal agreed in March to give it the funds to keep paying public sector wages, pensions and bills.
German finance minister Wolfgang Schaeuble said on Saturday there were limits to the aid that could be granted to Greece and said the crisis-stricken country should not expect to be granted another programme.
However, Eurogroup head Juncker was quoted in Austria's Tiroler Tageszeitung newspaper on Saturday as saying Greece will not leave the euro zone unless the country "totally refuses" to fulfil any of its reform targets, adding he expected Athens to double its efforts to meet these goals.