Greece enters ‘crucial weeks’ with troika praise for €11.5bn cuts progress

Finance minister Yiannis Stournaras talks of ‘bridge of hope’ in reform drive.

The next few weeks will be crucial if Greece is to avoid defaulting on its mountain of debt and being ejected from the eurozone, the finance minister Yiannis Stournaras warned on Sunday as visiting EU-IMF officials took the rare step of concluding an inspection tour of the country with words of praise.

Six weeks after taking power, the conservative-led government of prime minister Antonis Samaras won plaudits from auditors who announced they would issue a final verdict on the near-bankrupt nation in September.

“Talks went well, we made good progress,” the IMF’s mission chief for Greece, Poul Thomsen, said after discussions with Stournaras. “We will take a break and come back in early September.”

A technocrat who has long advocated stringent reforms to the eurozone’s weakest economy, Stournaras insisted the three-party coalition in Athens was determined to reduce the deficit – whatever the cost. “The country is committed to implementing a series of measures and reforms to revive the economy and permanently remove the threat of bankruptcy,” he told the Ethnos newspaper in his first big interview since assuming the post. “The coming weeks are crucial for the country’s survival because if we go down a different path than logic tells us, it could drive us outside the eurozone and into bankruptcy.”

A senior finance ministry official, requesting anonymity because of the sensitivity of the matter, said “a fair amount” of a new package of spending cuts had been decided. “We have done a lot of work to be able to agree today on a fair amount of the €11.5bn (£9.1bn) of measures,” he told reporters. “We will continue to work so that we can send them some measures by the end of the week. We must conclude by early September.”

The troika of creditors – the EU, ECB and IMF – has made the cuts a condition of further rescue loans. Under pressure from the triumvirate, the government has also pledged to enact long-delayed reforms to make the economy more competitive.

Presenting a 10-point plan on Thursday, the development minister Costis Hadzidakis said he did not care about the political cost of the changes – from overhauling the Byzantine bureaucracy to liberalising closed shop professions. “What is important is the salvation of the country,” he said. “Through these reforms we want to send a message to all, that Greece is determined to reverse the climate, change course and win the bet.” With Athens facing the challenge of repaying a €3.2bn bond which matures later this month and state coffers on course to dry up “within weeks”, according to the deputy finance minister Christos Staikouras, the troika’s forthcoming review will determine whether Greece receives a fresh installment of aid, worth €31.5bn, in September.


Categories: Europe, Greece

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.