Greece under pressure to bolster cuts for debt deal

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Greece under pressure to bolster cuts for debt deal

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Greece has been in negotiations with the so-called 'troika' of creditors.

14 October,2012 02:18 pm

Greece was under pressure from international creditors to beef up a controversial austerity package in return for loan relief, officials said as Prime Minister Antonis Samaras said a deal was in sight.Samaras told Kathimerini daily on Sunday that the cuts could be approved by parliament in a matter of days after a European summit on October 18 that will discuss Greeces economic situation.He added that by October 18, his government and a mission of EU-IMF auditors will have fully concluded an agreement on fiscal and structural prior actions required to release 31.5 billion euros ($41 billion) in loans pending since June.Greece has been in negotiations with the so-called troika of creditors -- the EU, IMF and the European Central Bank -- for the last three months.The government thought that a new austerity package worth 7.8 billion euros ($10 billion) this year would be enough to unblock the loans.But the troika are now demanding 9.2 billion euros in savings according to the finance ministry.We say 7.8 billion euros, they say 9.2 billion. We have to converge, a finance ministry source said after talks with the auditor mission on Saturday.The EU-IMF auditors say a greater-than-foreseen recession will undermine the governments forecasts, as will the need to support a new state health organisation that is deeply in debt.And still, the effort seems in vain. Despite attempts to trim it through a write-down, Greeces debt is expected to increase from 169.5 percent of output in 2012 to 179.3 percent in 2013 according to next years draft budget.Greece seeks a two-year extension from its creditors in order to apply the cuts and reforms, a breather the IMF is prepared to grant but which some eurozone states say will require more money for struggling Athens.The government has so far calculated an austerity effort of 13.5 billion euros in 2013-2014.But if an extension is not granted, measures worth 18.5 billion euros would be necessary, a Greek finance ministry source said.