Greece's new pledges will take epic battle to implement

Greece's latest fiscal and reform pledges may be enough to convince international lenders weary after years of broken promises to keep Athens hooked to a 130 billion euro lifeline, but the battle to implement it will be epic. Few question the new coalition government's resolve but many doubt whether the cantankerous public sector can or will implement the measures or the Greek public, reeling from years of austerity, can take much more without putting up a fight. "The political will is strong, but so are the obstacles - red tape, a demoralized and increasingly underpaid public administration are principal among them,» said George Pagoulatos, professor of economics at Athens University.

Greek officials say 11.5 billion euros of fiscal measures roughly agreed this week - although more painful for the public - will be easier to implement than the structural changes. Reforms such as liberalizing professions and markets including lawyers and pharmacies, have stumbled on strong union protests.

Others, such as cutting red tape for setting up a business, have been stuck in a bloated and ineffective public administration incapable of change. Since it was first bailed out two years ago, Greece has repeatedly fallen behind on reform pledges to its partners, who have threatened to cut off funding at the risk of unravelling the euro. Athens, which received a second bailout this year, blames a deeper than expected recession for its failures and wants two more years to hit targets in its new bailout deal.

Lenders say slow reforms have not given the program a chance to work and want to see action before considering any changes. Greek officials have temporarily set aside requests for renegotiation while they hammer out fiscal measures for 2013 and 2014 with the troika of International Monetary Fund, EU and European Central Bank lenders - mostly salary, pension and welfare cuts. Prime Minister Antonis Samaras's conservative-led government also announced the revival of a series of structural reforms to give the economy - stuck in its fifth year of recession - a much-needed boost if Greece is to ever escape a debt crisis shaking the single European currency.

The European Commission welcomed the announcements but urged the country to act on its promises. Greece is scrambling to pay a 3.2 billion euro bond due in August and officials say the state will run out of cash within weeks - making the troika's review crucial for its survival. After finalizing the proposed fiscal cuts with the troika inspectors, expected sometime this month, the government will take them through parliament in September or October.


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