– Greece agrees to £9bn ‘troika’ cuts (Telegraph, Aug 2, 2012):
Greek political leaders have agreed to €11.5bn (£9bn) of austerity cuts demanded under its bailout terms, opening the way for a deal with foreign lenders within the month, Greek officials said.
The junior partners in the conservative-led coalition government of Prime Minister Antonis Samaras set aside demands for an immediate renegotiation of the terms of the deal to ease talks with the troika of IMF and EU lenders.
With €3.2bn-worth of bond payments due in August, the clock is ticking for Greece to please visiting troika inspectors, who will rule on whether Athens gets more cash from its €130bn bailout.
“The prime minister’s proposal was accepted by political leaders,” Finance Minister Yannis Stournaras told reporters after a nearly three-hour meeting, Reuters reported.
Samaras and Stournaras have made it clear they do not want to raise the issue of renegotiating the bailout deal with lenders before Greece regains credibility after two years of missed targets and empty promises.
Greek officials say Athens has fallen behind because of a deeper than expected recession. Lenders blame the slow implementation of growth-boosting reforms and say the programme must be given a chance to succeed before being adapted.
Greek party leaders had been struggling for weeks to find the measures the troika demanded for 2013-2014, which include salary, pension and benefit cuts certain to further upset a public reeling from two years of austerity.
Over the weekend it appeared that an overall agreement was near on the cuts but the junior partners and especially Greek Socialist leader Evangelos Venizelos had insisted Greece must demand two more years to achieve its targets.
Officials close to Samaras said he had made clear to his political partners that Greece had no choice but to agree to the measures now and renegotiate later.
“He told them that any other decision would lead Greece to isolation and may mean its exit from the euro,” an aide told Reuters on condition of anonymity.
Venizelos told reporters after the meeting he still believed Greece should demand an immediate renegotiation of the package to win more time but that he was setting aside his request for now in the interest of the country.
“We are not the ones to lead the country to elections,” he said. “I am forced to accept the prime minister’s view because he is the one responsible.”
The debate showed the first serious cracks in the uneasy coalition between the two leftist and conservative parties.
The smaller, Democratic Left party tried to convince supporters after the meeting it remained faithful to pre-election pledges to renegotiate the bailout.
“We will not take measures to further burden Greek society,” its leader Fotis Kouvelis told reporters. “We are not giving up the effort to … detach ourselves from the burdensome bailout terms.”