Tags: Greece | Financial | Crisis | cuts

Greece Seeking to Finalize $15 Billion in Spending Cuts

Monday, 20 Aug 2012 07:19 AM

 

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Greece's finance officials were working Monday to finalize 11.5 billion euros  ($14.19 billion) in spending cuts necessary for it to continue receiving the international funding that is protecting it from bankruptcy.

Finance Minister Yannis Stournaras was meeting with his deputy ministers and Labor Minister Yannis Vroutsis to hammer out the measures for 2013 and 2014, which officials aim to have finalized in time for a visit to Athens on Wednesday by Luxembourg Prime Minister Jean-Claude Juncker, who chairs the eurozone finance ministers' meetings.

After talks with Juncker, Prime Minister Antonis Samaras will head to Berlin and Paris on Friday and Saturday for talks with German Chancellor Angela Merkel and French President Francois Hollande.

Greece has been dependent on two multi-billion international bailouts from other Eurozone countries and the International Monetary Fund since its debt crisis came broke in 2010. But despite taking a series of harsh austerity measures that saw salaries and pensions slashed and repeated rounds of tax hikes, the results have not been what European and Greek officials hoped for.

The country has fallen behind on implementing reforms and austerity measures demanded in exchange for the rescue funds, fueling impatience in Germany — the largest single contributor to the bailouts — and other eurozone countries and speculation that Greece will have to leave the euro, the currency used by 17 European nations.

Greece's debt stands at more than 300 billion euros, and the economy is struggling through a fifth year of recession with unemployment at above 23 percent.

Samaras' fragile three-party coalition government, formed after two inconclusive elections in May and June, has said it hopes to renegotiate parts of the bailout conditions, mainly seeking an extension in the two-year austerity deadline.

Germany, the largest single contributor to the rescue loans, has long said Greece should get no more leeway and must stick to its pledges.

Juncker argued over the weekend that Greece will not leave the eurozone, saying in an interview with an Austrian newspaper published Saturday that such an event would carry unforeseeable risks and would not be politically feasible.

"In the case of a total refusal by Greece regarding budget consolidation and structural reforms, one would have to deal with the question," he said, according to the report. "But because I assume that Greece will try to redouble its efforts and achieve the targets that have been set, there is no reason to assume that this exit scenario can become relevant."

Germany's vice chancellor, Economy Minister Philipp Roesler, who takes a hard line on Greece, said recently that the idea of the country leaving the euro had "lost its horror."

Athens insists the country must remain in the euro — something which repeated opinion polls have shown the vast majority of Greeks want.

"We must stay alive, keep ourselves under the umbrella of the euro, because only that choice can protect us from a poverty we have not lived through," Stournaras was quoted as telling the Sunday newspaper To Vima.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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