Troika to judge cuts plan

Government officials Friday were putting the finishing touches to a blueprint for 11.5 billion euros in cuts for 2013 and 2014 ahead of a crucial meeting Sunday morning with envoys representing the country’s foreign creditors. Officials of the European Commission, European Central Bank and International Monetary Fund, known as the troika, have reportedly demanded a detailed list of the proposed measures- along with their estimated contribution to budget savings. Finance Minister Yannis Stournaras has underlined the government’s determination to make the cuts in order to secure a positive report by the troika next month and thus clinch crucial rescue loans.

But other ministers have reportedly objected to the proposed cutbacks, with some even seeking additional funding, while several state-controled companies have refused to trim their employees’ wages.

Prime Minister Antonis Samaras is said to have pressed for extra cuts to operational costs. Defense Minister Panos Panagiotopoulos said another 1 billion euros will be shaved off defense spending but said efforts would be made to avoid cuts to so-called “special salaries” of armed forces staff. Stournaras is expected to discuss this with troika officials Sunday as well as how the government plans to make up a shortfall in revenues that would be caused by allowing Greeks to pay their income tax in instalments.

As regards pensions, there are likely to be small cuts to those over 700 euros with larger reductions above the 1,400-euro mark. Plans to cap pensions at 2,500 euros and to extend the retirement age to 67 from 65 will likely be scrapped. People due to retire in the next two years will be obliged to put it off for an extra year.
The troika officials, who are to leave Athens tomorrow afternoon, are to sign off the measures in September before issuing their review.

Before that Samaras is to have a flurry of meetings with European leaders to whom he is expected to emphasize Greece’s commitment to reforms. On August 22, he is to meet with Eurogroup Chairman Jean-Claude Juncker, before traveling to Berlin on August 24 and Paris on August 25 for talks with German Chancellor Angela Merkel and French President Francois Hollande.

On Monday Samaras is to receive Israeli President Shimon Peres in Athens. Later in the day, the premier is to reconvene with his coalition partners, PASOK leader Evangelos Venizelos and Democratic Left chief Fotis Kouvelis, for fresh talks on the fleshing out of budget savings.


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