6th August, 2012
ATHENS: Greece held talks with its international lenders on Sunday on further spending cuts it must adopt to secure a new 31.5 billion euro tranche of aid that is vital to keep the country afloat.
Finance Minister Yannis Stournaras said in comments published ahead of the meeting that the new government was committed to reforms aimed at boosting the debt-laden economy and staving off bankruptcy and a threatened eurozone exit.
Stournaras said the next few weeks were crucial for Greece’s future, as the so-called troika of creditors — the EU, IMF and the European Central Bank — determines whether to unlock the 31.5 billion euros ($39 billion) next month.
“We made good progress,” IMF official Poul Thomsen told reporters after the meeting, adding that the auditors would return in September.
Greece has to slice another 11.5 billion euros off its spending plans for the next two years to win the money but further austerity measures are deeply unpopular in a country also struggling with deep recession and high unemployment.
The funds are due to be disbursed in September as part of a 130 billion euros bailout package, Greece’s second international lifeline in two years, but the required cuts have been delayed by political turmoil that triggered two elections in six weeks.
“The country is committed to implementing a series of measures and reforms to revive the economy and permanently remove the threat of bankruptcy,” Stournaras told the Ethnos newspaper.
He acknowledged that Greeks have had to endure “major sacrifices” as the new coalition government that emerged after the June election imposes tough austerity measures, including salary, pension cuts and welfare.
“The coming weeks are crucial for the country’s survival because if we go down a different path than logic tells us, it could drive us outside the eurozone and into bankruptcy.” The conservative-led coalition government of Prime Minister Antonis Samaras was formed in June with a pledge to renegotiate the EU-IMF bailout and place more emphasis on growth.
But Greece’s European partners have warned that the country is in no position to demand concessions when its reforms are months behind schedule.
“There is a serious effort” to reach an agreement, a finance ministry source said as the talks got under way in Athens.
Stournaras said he hoped Greece could emerge from its deep recession by speeding up a privatisation programme and structural reforms which are also being sought by its international creditors.
Greece was given a temporary lifeline last week when the ECB agreed on a move which will give Athens access to another four billion euros of funds and ensure its financial survival until September, a German newspaper reported Saturday.