Bloomberg News

Greek Finance Minister Says Work Continues on Budget Cuts

August 07, 2012

Greek Finance Minister Yannis Stournaras said the government is still working on identifying nearly a third of the budget cuts required by international creditors to resume the flow of funds under a rescue package.

Reducing the number of state employees may need to be considered, Stournaras told reporters in Athens today after a meeting with President Karolos Papoulias.

“The 11.5 billion euros ($14.3 billion) is a significant number,” Stournaras said. “We’re not quite there. There’s still a gap of around 3.5 billion to 4 billion euros.”

Stournaras said the savings may be achieved by reviving a “labor reserve” for civil servants, in which excess staff are placed in a special program for a period of time instead of being dismissed outright. The comment drew immediate criticism from the leaders of the two coalition parties supporting the government of Prime Minister Antonis Samaras.

“I am categorically opposed,” Fotis Kouvelis, the leader of the Democratic Left party, told reporters after meeting with Samaras and Evangelos Venizelos, the former finance minister. “We must avoid adding more unemployed people to the ranks of those who are already unemployed.” The plan is a “fiasco,” he said.

Troika

Samaras is due to visit the finance ministry tomorrow at 4 p.m. to assess the work being done to complete the budget savings for 2013 and 2014. Representatives from the so-called troika of the European Commission, European Central Bank and International Monetary Fund return to Athens early next month to review the program, which will determine whether Greece will receive further funds from rescue packages amounting to 240 billion euros.

Venizelos, who negotiated a second bailout earlier this year and now heads the Pasok party, said the idea of job cuts in the public service had been “imposed” on the government by the troika and that he was opposed to it.

The country risks running out of money without the disbursement of 4.2 billion euros that was initially due in June as the first installment of a 31 billion-euro transfer.

The government and the troika at the weekend agreed on the need to strengthen policy efforts to comply with the bailout terms after the officials spent nearly two weeks consulting with the new government in Athens.

To contact the reporters on this story: Marcus Bensasson in Athens at mbensasson@bloomberg.net; Maria Petrakis in Athens at mpetrakis@bloomberg.net

To contact the editor responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net


Toyota's Hydrogen Man
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus