Greek Prime Minister Antonis Samaras struggled to clinch agreement with his coalition partners on an €11.5 billion budget-cut package that is key to receiving international aid funds.
Samaras was handed the third refusal in less than two weeks yesterday from Democratic Left leader Fotis Kouvelis and Pasok leader Evangelos Venizelos, the junior partners in the coalition who met to discuss proposed cuts to wages, pensions and benefits. Finance Minister Yannis Stournaras and the “troika” of inspectors from the European Commission, the European Central Bank and the International Monetary Fund have been locked in talks for two weeks on carving out savings.
The stand-off leaves Samaras heading to meetings with his Italian, Spanish and Irish counterparts without solid domestic political backing on the package he has said is necessary to restore Greece’s credibility and keep the country in the euro. Euro area finance ministers are expected to rule on the budget measures on October 8.
A Finance Ministry official said €9.5 billion of the package had been agreed, with €6.5 billion of those related to cuts in pensions, wages and benefits. An increase in the retirement age to 67 from 65 will bring in €1 billion. Samaras is facing opposition from Venizelos and Kouvelis on across-the-board cuts to pensions and wages, demands to fire civil servants and changes to labourlaws as popular opposition rises in the fifth year of recession with almost a quarter of the workforce unemployed. All public transit workers walked off the job yesterday, affecting subway, bus and train services. Some progress was made in five hours of talks last night, said the official, who asked not to be identified by name. He said an agreement may be reached soon, as new proposals to make up for the shortfall were brought to the table.
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