EU's Barroso in Greece to finalise spending cuts

European Commission President Jose Manuel Barroso was to meet Prime Minister Antonis Samaras on Thursday as officials threw together a list of 11.6 billion euros in spending cuts to jumpstart reforms.

Barroso, who is making his first visit to Athens in three years, is to meet with Samaras at 1430 GMT.

The spending cuts, reportedly to come largely from pensions, health support and benefits, are designed to help Greece negotiate a longer fiscal overhaul to cope with a deep recession, a finance ministry official said.

"It's a weapon to request a two-year extension," the official said after talks between Finance Minister Yannis Stournaras and senior EU-IMF auditors.

IMF representative Poul Thomsen said he was "absolutely" satisfied with the course of the ministry talks so far.

Greece has so far avoided broaching the extension issue amid open hostility from its European creditors who accuse the crisis-hit country of dragging its feet on the necessary reforms agreed over the past two years in return for cash.

The spending cuts finalised on Thursday, still to be approved by the socialist and moderate leftist parties in conservative Prime Minister Antonis Samaras' coalition, were originally to have been voted into law last month.

But the process was delayed as Greece held back-to-back elections in May and June before a workable government could be formed.

The audit report, expected to be made public at the end of August or early September, will determine whether Greece will draw 31.5 billion euros from its EU-IMF loan programme to keep the economy afloat.

The money is needed to pay state salaries and pensions, and to recapitalise banks hit by a sovereign debt rollover earlier this year.

Greece must also redeem 3.2 billion euros in debt to the European Central Bank that expires on August 20.

But in Brussels as in Athens most agree that Greece will not be able to reach the goals included in the second bailout package that it signed with its creditors in February.

Government officials are hoping for a message of support at a time when speculation is rife that Greece will be forced to crash out of the eurozone.

"We now believe the probability that Greece will leave EMU in the next 12-18 months is about 90 percent, up from our previous 50-75 percent estimate, and believe the most likely date is in the next 2-3 quarters," said Citibank chief economist Willem Buiter.

Analysts of macro economic research consultancy Capital Economics estimate that a possible extension would equal an additional help of 40 billion euros ($48.4 billion) for Greece, from overburdened European rescue funds.

Analysts from French bank Societe Generale believe this sum to be around 60 billion euros.

For European countries that have already asked their parliaments twice, in 2010 and 2012, to provide their Greek partners with emergency loans, a third rescue would be too much, especially at a time of recession, observers say.

Greece's main union GSEE said the new cuts were "unfair and ineffective" and constituted a "killing blow" after two years of prior austerity.

Unions are determined to give a "dynamic" response, it added.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • AFP monitoring deployment of Chinese seaplanes in Spratlys
    AFP monitoring deployment of Chinese seaplanes in Spratlys

    The Armed Forces of the Philippines (AFP) is adopting a wait and see approach amid reports that China will soon deploy seaplanes to further strengthen its maritime claims in the disputed Spratlys. Brig. Gen. Joselito Kakilala, spokesman for the military and commander of the AFP Civil Relations Service, said they have yet to ascertain the real purpose behind China’s continuing aggressive moves in the region. “We will wait and see before coming up with an official stand,” Kakilala said when …

  • US eyes access to Phl bases in 8 locations
    US eyes access to Phl bases in 8 locations

    The United States has asked for access to Philippine military bases in eight locations to rotate troops, aircraft and ships as Washington shifts its forces to Asia and as China expands its military presence in the South China Sea. US Defense Secretary Ash Carter, in a speech in Arizona, has outlined Washington’s next phase in its Asia “pivot,” deploying its most sophisticated destroyers, bombers and fighters to the region. The Asia “pivot” has already seen US Marines rotating through the …

  • Washington bucks China’s aggressive actions
    Washington bucks China’s aggressive actions

    Short of condemning China’s aggressive actions in the West Philippine Sea, a senior US military official said Washington does not support any act of coercion and bullying. “We don’t stand for coercion, bullying and aggressiveness,” said Brig. Gen. Christopher Mahoney, assistant US military director for  Phl-US Joint Balikatan Exercises 2015. At the sidelines of this year’s joint military exercises’ static aircraft display held at Clark Air Base in Pampanga, Mahoney told a media briefing that …

  • ‘Giving Bangsamoro police control is constitutional’
    ‘Giving Bangsamoro police control is constitutional’

    The proposed grant to the chief minister of the envisioned Bangsamoro region of operational control over police forces in the area is consistent with the Constitution, a senior administration lawmaker said yesterday. It is clear in the proposed BBL that the Bangsamoro police will be part of the Philippine National Police (PNP), while the Bangsamoro Regional Police Board (BRPB) will be part of the National Police Commission (Napolcom) and will carry out Napolcom’s mandate in the region,” he …

  • Noy off to KL for Asean meet
    Noy off to KL for Asean meet

    President Aquino will arrive here this afternoon with Manila hopeful of support from the Association of Southeast Asian Nations (ASEAN) to achieve peace and stability in the West Philippine Sea (South China Sea) as well as economic prosperity and inclusive growth among the people in the region. Philippine Ambassador to Malaysia Jose Eduardo Malaya III said that with respect to the dramatic developments in the South China Sea, Malaysian Foreign Minister Anifah Aman had called for the early …

  • Madrid Fusion Manila reignites Pinoy appetite for great food
    Madrid Fusion Manila reignites Pinoy appetite for great food

    After months of preparation and hard work from both the government and private sectors, the future of food is finally here in the country’s capital. Madrid Fusión Manila opened its doors on Friday to an international delegation who eagerly awaited the discussions of some of the most renowned and revered names in the culinary world. Madrid Fusión Manila is a historic gastronomic event marked by talks and exhibitions that showcases Spain and the Philippines’ shared cultural heritage, as well as …

  • Family receives execution order, visits Mary Jane
    Family receives execution order, visits Mary Jane

    As Philippine officials continue to plead for a stay in the execution of death convict Mary Jane Veloso, the Indonesian government has sent a notice to her family ordering her execution at an undisclosed date, the Department of Foreign Affairs (DFA) said yesterday. Foreign Affairs spokesman Charles Jose said Indonesian authorities also allowed Veloso’s family and her lawyers to visit her on Nebu Kambangan execution island. “The Prosecutor gave notice letter to the family of Mary Jane …

  • ‘Pinoys’ cheerful attitude backs tourism campaign’
    ‘Pinoys’ cheerful attitude backs tourism campaign’

    The 2015 World Happiness Report ranking the Philippines as 90th among 158 happiest countries is a validation of the government’s tourism campaign, “It’s more fun in the Philippines,” a Palace official said yesterday. The news did not come as a surprise as Filipinos are naturally cheerful, Secretary Herminio Coloma Jr. of the Presidential Communications Operations Office said. …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options