Sept. 10 (Bloomberg) -- Greek Prime Minister Antonis Samaras failed to secure agreement from his coalition partners on 11.5 billion euros ($14.7 billion) of spending cuts required by the country’s lenders to release funds needed to keep the country in the euro.
Democratic Left leader Fotis Kouvelis, whose party is one of the three in Samaras’s coalition government, said no decision had been taken on the package and that poorer Greeks must be protected from more austerity. The three leaders agreed to meet again on Sept. 12, two days before euro area finance ministers meet to be briefed on Greek progress.
“The recession is deep and if these measures aren’t accompanied by growth measures, they will be ineffective,” Kouvelis said after the meeting with Samaras and Pasok leader Evangelos Venizelos in Athens yesterday. “Our European partners need to know that Greeks can’t take anymore. Nothing can be taken for granted.”
Samaras has said his two-year package of spending cuts contains unfair and painful decisions that are necessary to restore credibility and keep the country in the euro area. With his New Democracy party holding just 129 seats in the 300-seat chamber, he relies on Pasok’s 33 seats and Democratic Left’s 17 to secure parliamentary approval.
Agreement on the cuts, which must be approved by the so-called troika of inspectors from the euro area, European Central Bank and International Monetary Fund, may allow the release of a 31 billion-euro payment that will mainly go to recapitalize the nation’s banks and boost liquidity in a cash-starved economy undergoing a fifth year of recession.
Venizelos told reporters that work on securing agreement was in its final phase and that the troika, who met with Finance Minister Yannis Stournaras yesterday, hadn’t accepted all the proposed measures. A Pasok party official who asked not to be identified said the troika disputed about 2 billion euros of the proposed measures.
Samaras is due to meet the troika representatives at 11:45 a.m. today. They will also meet with Venizelos today.
Lenders to Greece held back funds pledged under two rescue packages totaling 240 billion euros in the wake of inconclusive elections in May and June, which derailed reforms, halted state-asset sales, and stoked concerns about the nation’s future in the 17-nation euro.
European leaders and officials including EU President Herman Van Rompuy and German Chancellor Angela Merkel have underlined to Samaras that the country must show it is implementing commitments made earlier this year to secure a second rescue package before any discussion can be held on lightening the terms of the program. Greece has said it wants to spread the austerity measures over four years rather than two.
“The issue we have is for the troika to accept the measures,” Simos Kedikoglou, a government spokesman, told reporters. “We have to succeed. We have to agree on measures with the troika that are acceptable and effective and produce the desired financial results.”
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