Greek Creditors See Agreement in ‘Coming Days’ on New Measures

Greece’s creditors, known collectively as the troika, said they expect a staff-level agreement in coming days that would pave the way for the next payment of aid funds to the debt-stricken country.

The European Commission, European Central Bank and International Monetary Fund said “most of the core issues” have been settled, according to a joint statement e-mailed today.

Prime Minister Antonis Samaras faced down a growing revolt among coalition partners over changes to labor rules demanded by the troika as he has tried to come up with an additional 13.5 billion euros ($17.7 billion) of austerity to appease Greece’s creditors. The endorsement may bolster Samaras as he attends his first European Union summit tomorrow where he will begin lobbying for a two-year extension of the country’s bailout target.

“The authorities and staff teams agreed on most of the core measures needed to restore the momentum of reform and pave the way for the completion of the review,” the statement said.

A final deal will help unlock a 31 billion-euro aid installment that the country needs to avoid a second default. Greece remains on life support with the country mired in its fifth year of a recession that has shrunk the economy by almost 20 percent.

Samaras faces growing dissent within his multi-party coalition over the troika’s demand to overhaul some labor market rules.

‘Playing with Fire’

Evangelos Venizelos of the socialist Pasok party and the Democratic Left’s Fotis Kouvelis, whose parliamentary seats give Samaras the majority in Parliament he needs to govern, both said they wouldn’t accept further changes to labor laws after a three-hour meeting with the prime minister in Athens yesterday.

“Further interventions on labor issues don’t help productivity, competitiveness or employment,” Venizelos told state-run NET TV. “We must look elsewhere now and the insistence on this is wrong,” he said, adding some EU members were “playing with fire.”

Samaras is seeking to spread pension and wage cuts over four years rather than two to smooth the impact His New Democracy party has only 128 seats in the 300-seat Parliament and relies on Pasok and Democratic Left’s combined 50 seats to turn any pledge to lenders into law.

To contact the reporter on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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