Samaras Says Greek Budget Success Commits Euro Area to More Aid

Greek Prime Minister Antonis Samaras sought to tie Germany and other euro-area nations into giving Greece extra aid in 2014, saying they promised more support as long as he meets budget-austerity targets.

Five days before German elections, Samaras cited a Nov. 27 pledge by euro-area finance ministers to “consider further measures and assistance” for Greece once it achieves an annual budget surplus excluding interest payments -- known as a primary surplus.

Under its 240 billion-euro ($321 billion) rescue program, Greece must eliminate the primary deficit this year and post a primary surplus of 1.5 percent of gross domestic product in 2014. After the Greek economy contracted the least in three years in the second quarter and tourist arrivals rose in summer, the government in Athens may achieve a primary surplus this year while facing an extra financing need in 2014.

“According to last year’s Nov. 27 Eurogroup decision, if Greece indeed achieves its targets regarding the primary surplus and obviously the structural reforms we are going through, then all temporary funding problems will be taken care of,” Samaras told reporters today in Brussels, where he met the leaders of European Union institutions. “We are achieving our targets.”

EU Support

Samaras wants to muster EU support for more Greek aid as German Chancellor Angela Merkel seeks re-election on Sept. 22 with a promise that public-sector loans to Greece won’t be written off and the country, which sparked Europe’s debt crisis in late 2009, will be held to budget-cutting goals. The International Monetary Fund estimated in July that Greece faces a financing gap in 2014 of 4.4 billion euros.

Samaras rejected any further fiscal tightening for Greece, which is in the sixth year of recession and has record unemployment of almost 28 percent. He pledged to push ahead with efforts to deregulate the economy, saying they would boost the budget.

“What we have to do is not any additional austerity measures but structural reforms with positive fiscal impact,” Samaras said at an appearance with Jose Barroso, president of the European Commission, the EU’s executive arm. “That’s what we intend to do.”

Barroso praised the achievements of Samaras’s 15-month-old coalition government, which ended a Greek political stalemate last year that had led to speculation the country could be forced out of the euro.

‘Strong Commitment’

Barroso said Greek authorities have shown a “strong commitment” to respect the aid program’s budget conditions and Greece’s belt tightening was starting to pay off.

“There is light at the end of the tunnel,” he said. “We expect a gradual return to growth in 2014.”

Barroso said it was premature to comment on any extra help Greece may need next year, saying commission experts were due to travel to Athens within a week to start the next round of scrutiny of the country’s budget progress.

“The current program is fully financed until mid-2014,” Barroso said. “It is no secret that we’ll have to look again at Greece’s financing needs and any possible gaps.”

To contact the reporters on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net; Marcus Bensasson in Athens at mbensasson@bloomberg.net.

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

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