Cabinet meeting to finalize budget cuts

Greece’s cabinet was meeting on Friday to iron out differences between the country’s coalition partners on a painful new round of cuts necessary to unlock bankruptcy-saving loans from the EU and the IMF. Prime Minister Antonis Samaras has run into resistance from his socialist and moderate leftist allies over additional cuts to salaries and pensions which the government partnership had promised to resist when it was formed in June.
Media on Friday ran a ”basic scenario” for the austerity cuts, which Greece had originally pledged to finalise two months ago but were delayed as the country held back-to-back elections.

Initially set at 11.5 billion euros ($14.3 billion) and applicable to 2014, the overall target could reach 13.5 billion in order to counterbalance state revenue lost to a burgeoning recession now in its fifth year.

The measures reported on Friday include a 3.5-billion-euro slash to pensions, health cuts worth 1.47 billion euros and a 517-million-euro cut to defence.

”This list did not come from us,” said a Finance Ministry source, declining to comment on the figures.

Samaras on Thursday said this would be the last package of cuts and insisted that the sacrifices were ”inevitable” to keep the country in the eurozone.

”Without them, the country would return to zero credibility and, in essence, would exit the eurozone,” the premier told members of his conservative party.

Samaras will likely need to confer with his coalition partners again next week to finalise the cuts, which unions have pledged to resist.

The blueprint will then need to be submitted to the so-called ’troika’, the mission of auditors from the EU, the IMF and the European Central Bank that are monitoring Greece’s application of reforms in return for bailout funds.
The mission’s chiefs will be in Athens next week to resume the audit.

A loan instalment of 31.5 billion euros, part of a 130-billion-euro bailout from the EU and the IMF, currently hangs in the balance. 


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