Revised Greek plan fails to please troika

INSPECTORS FROM the European Commission, the European Central Bank and the International Monetary Fund – the troika – have told the Greek government they reject as unsatisfactory spending cuts of between €2.5 billion and €5 billion contained in a new €11.5 billion austerity package that the country must pass to get more financial aid.

The talks were described by Greek finance minister Yannis Stournaras as “difficult, just as the measures are difficult”.

The representatives of Greece’s foreign lenders told prime minister Antonis Samaras yesterday they expected the new austerity package to allow for public-sector firings, a policy the coalition parties reject.

The Greek side plans to reduce numbers radically in the public sector through a so-called “labour reserve”, whereby civil servants would be sent home on reduced pay before being eventually dismissed.

Mr Stournaras said the government was now “trying to convince [the troika] on the soundness of our positions”.

That task has been made all the more difficult after Mr Samaras’s junior coalition partners – Evangelos Venizelos of socialist Pasok and Fotis Kouvelis of Democratic Left – on Sunday reiterated their objection to blanket cuts on wages and pensions.

“Our European partners must realise that the Greek people can’t take it any more,” said Mr Kouvelis, after the coalition leaders’ meeting, which failed to sign off on the austerity package.

After separate talks with the troika inspectors yesterday, Mr Venizelos expressed a similar position.

“The measures on wages and pensions cannot exceed the tolerance threshold of the Greek people”.

Much of the Greek press is sceptical about the public statements of the junior coalition partners, which while complaining bitterly about blanket pension and wage cuts, also say they fully back the government.

The three coalition leaders will meet again on Wednesday.

Mr Samaras in the meantime will travel to Frankfurt today for talks with European Central Bank president Mario Draghi.