Greece Pushes Back Against Demand for More Cuts to Get Bailout
February 10, 2012, 6:12 PM ESTBy Simon Kennedy and Maria Petrakis
(See EXT4 for more on Europe’s debt crisis.)
Feb. 10 (Bloomberg) -- A leader of Greece’s coalition government pushed back against German demands for deeper budget cuts as the price of the bailout needed to stave off a financial collapse.
George Karatzaferis, the leader of one of the three parties supporting interim Prime Minister Lucas Papademos, said he wouldn’t support austerity measures worked out for a rescue. Karatzaferis, who heads the Laos party, spoke in Athens hours after German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin that Greece was missing debt-cutting targets.
Schaeuble said that current plans would leave its debt as high as 136 percent of gross domestic product by 2020, according to two people who took part in the meeting and who spoke on condition of anonymity because it was private. That compares with the 120 percent foreseen in a 130 billion-euro ($172 billion) bailout being negotiated.
“The Greek offer is not sufficient and they have to go away to come up with a revised plan,” Bertrand Benoit, a spokesman for the German Finance Ministry in Berlin, said by telephone today.
Emergency talks of euro-area finance chiefs broke up late last night with Luxembourg Prime Minister Jean-Claude Juncker saying Greece must turn its budget cuts into law, flesh out 325 million euros in spending reductions and have its major party leaders sign up to the program so they don’t retreat after upcoming elections.
Juncker’s Condition
“In short: no disbursement without implementation,” Juncker said. He set another extraordinary meeting for Feb. 15. “We can’t live with this system while promises are repeated and repeated and repeated and implementation measures are sometimes too weak,” he said.
The impasse left European stocks falling for the fourth time in five days and the euro declining from yesterday’s two- month high against the dollar.
In a bid to pressure his country’s lawmakers, Greek Finance Minister Evangelos Venizelos said the parliamentary vote amounted to a ballot on euro membership.
“If we see the salvation and future of the country in the euro area, in Europe, we have to do whatever we have to do to get the program approved,” Venizelos said in Brussels.
Resolution of the aid talks, which have dragged on since July, would allow Greece to make a 14.5 billion-euro bond payment on March 20 and contain the threat that speculators will target debt-saddled nations including Italy and Portugal.
--With assistance from Rainer Buergin and Brian Parkin in Berlin. Editors: James Hertling, Patrick Henry
To contact the reporters on this story: Simon Kennedy in Brussels at skennedy4@bloomberg.net; Maria Petrakis in Athens at mpetrakis@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net
