A day after a stormy meeting of the government’s three coalition leaders, which ended in agreement for the implementation of 11.5 billion euros in budget cuts for 2013 and 2014, Prime Minister Antonis Samaras met with Finance Minister Yannis Stournaras on Thursday for a more detailed briefing about how the tough savings can be made. Stournaras, and Alternate Finance Minister Christos Staikouras, briefed the premier following their talks with representatives of Greece’s foreign creditors - the European Commission, European Central Bank and International Monetary Fund, known as the troika.
Ministry sources said there had been “extensive discussions” on the possible sources for the cuts and that a subsequent meeting would be held soon, probably on Sunday. Troika envoys did not issue an announcement after the talks but the IMF’s representative, Poul Thomsen told reporters that the meeting had been “excellent.”
Despite tense talks on Wednesday, Samaras managed to secure the support of his coalition partners - PASOK leader Evangelos Venizelos and Democratic Left chief Fotis Kouvelis - who had demanded earlier that the measures be staggered over four years instead of two.
The premier’s logic - that Athens secures a favorable review from the troika to safeguard further rescue loans and its position in the eurozone - prevailed. But Samaras is said to be keen to ensure the new cuts do not bring further pain to low-income Greeks.
Sources said the PM insisted that a proposed 30-euro reduction to farmers’ pensions be scrapped and that low-level pensions remain untouched. But such concessions will necessitate other cuts, such as the reduction in the so-called “special salaries” of certain categories of civil servants, such as police officers and judges, and deeper cuts to state operational costs.
Sources said that the government has yet to agree with the troika on its plan for income tax to be paid in nine or 10 instalments. The Greek side had wanted this option to apply to anyone earning under 100,000 euros, while the troika has suggested the cieling be set at 60,000. If the instalment scheme applies, the government hopes to collect 70 percent of this year's income tax by February.
It is not clear if Samaras's wish for low pensions not to be cut will be fulfilled. The government had been aiming to cap pensions at a maximum of 2,400-2,600 euros but there are doubts about whether this would stand up in court. Given that the savings from such a measure would be fairly minimal, the government may look to trim pensions below 1,000 euros. There will definitely be cuts to all pensions above 1,400 euros.
Samaras is expected to discuss all this, and privatization plans, with Venizelos and Kouvelis early next week, while his talks with ministers today are expected to focus on the future of Skaramangas shipyards.
On August 24 and 25, the PM is to meet German Chancellor Angela Merkel in Berlin and French President Francois Hollande. Government spokesman Simos Kedikoglou repeated yesterday that the priority is still Greece’s continued presence in the eurozone.
“The goal is for the country to stay in the euro,” he said. “No other alternative, enforceable proposal has been made.”