Bloomberg News

Greece Is Still Working on Budget After Leaders’ Athens Meeting

July 18, 2012

Greece’s coalition government is still working on completing a 11.5 billion-euro ($14 billion) package of measures for the next two years to convince international creditors to disburse funds and avoid a halt in payments after political leaders met in Athens.

Greek Prime Minister Antonis Samaras and his two coalition partners, Pasok party leader Evangelos Venizelos and Democratic Left leader Fotis Kouvelis, and Finance Minister Yannis Stournaras met at Samaras’s office to decide on the cuts before the so-called troika of creditors return next week.

While leaders decided on the “general directions” for the measures, there is still a “road ahead” before the package is completed, Stournaras told reporters after the meeting.

About 8 billion euros of cuts and savings have been found so far out of the total, a finance ministry official told reporters after the meeting. The government is trying to avoid new budget measures for this year, due to a deeper-than-forecast recession, said the official, who asked not to be identified.

The European Commission, the European Central Bank and the International Monetary Fund, which make up the troika, have demanded the two-year package as a condition before any further funds can be disbursed under the two aid packages totaling 240 billion euros that have been granted to the country.

Greece will seek a bridge loan to cover its needs until September before beginning talks with creditors on extending the international bailout, a Finance Ministry official said yesterday. The official, who asked not to be identified, told reporters in Athens that it was more important for the cuts to be targeted and not across the board.

Two Greek bonds on the ECB’s books totaling 3.1 billion euros mature on Aug. 20, data compiled by Bloomberg show. The troika is due back in Athens on July 24 to discuss how to put Greece’s program on track as it tries to win a disbursement of 4.2 billion euros.

To contact the reporters on this story: Christos Ziotis in Athens at cziotis@bloomberg.net; Eleni Chrepa in Athens at echrepa@bloomberg.net

To contact the editors responsible for this story: Maria Petrakis at mpetrakis@bloomberg.net; Jerrold Colten at jcolten@bloomberg.net


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