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Greece: more time, more cuts?


economy

Greece: more time, more cuts?

Greece’s Prime Minister Antonis Samaras is on a charm offensive meeting eurozone leaders to try to persuade them that all his country needs is more time to get its economy sorted out – and slash its deficit.

He started with eurozone finance ministers’ chief Jean-Claude Juncker in Athens.

At a news conference after the meeting with Juncker, Samaras again promised to speed up reforms and privatisations.

Hours earlier he had said: “All we want is a bit of ‘air to breathe’ to get the economy running and to increase state income. More time does not automatically mean more money.”

That statement came in an an interview Samaras gave to Germany’s mass-market Bild newspaper, which has often taken a ferociously sceptical line on bailing out Greece.

“Let me be very explicit: we demand no additional money. We stand by our commitments and by fulfilling all our requirements. We have to crank up growth because that decreases the financial gaps,” Samaras added in the interview.

But the region’s politicians and economists are increasingly saying Athens is going to have to cut much deeper – with more unpopular austerity measures – if it hopes to get further bailout money.

RBC Capital Markets European Economist Gustavo Bagattini spelled out the problem: “The key thing for the Greek government is to re-establish some credibility that it can deliver on the fiscal measures, that it can deliver in structural reforms. And until you have that… we’re unlikely to see this charm offensive (by Samaras) work.”

In response to Samaras’s comments to Bild, the Dutch finance minister gave a rapid taste of attitudes in the eurozone’s less indebted northern states, questioning the idea of extending the time granted to Athens to meet its commitments: “If it concerns delaying reforms and budget cuts, then it is not a good idea,” Jan Kees de Jager told reporters.

Such messages are likely to be hammered home again to the Greek leader when he travels to Berlin on Friday to meet German Chancellor Angela Merkel and to Paris a day later for talks with French President Francois Hollande.

Ministers in Greece’s fragile three-party government coalition met this week frantically looking for ways to satisfy the “troika” of lenders – the EU, European Central Bank and International Monetary Fund – who are currently reviewing Athens efforts. Juncker saidf whether Greece gets more money will depend on the troika’s findings.

As the Greek people continue to take to the streets to rage against previous austerity measures, Junker remained adamant after his meeting with Samaras saying “this is Athens last chance”.

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