Belfast Telegraph

Monday 29 December 2014

Greek coalition agree spending cuts

Greek Prime Minister Antonis Samaras after his meeting with the other political leaders of the coalition government (AP)
Greek Prime Minister Antonis Samaras after his meeting with the other political leaders of the coalition government (AP)

Greek Prime Minister Antonis Samaras has talked the junior partners in his fragile coalition government into dropping objections to new spending cuts demanded by the debt-crippled country's bailout creditors, averting a crisis that could have eventually forced the country to abandon the euro.

Without the 11.5 billion (£9 billion) package of cuts for 2013 and 2014, Greece would lose access to the international loan programme which is protecting it from bankruptcy and would probably be forced out of the common European currency.

"The prime minister said that it must be accepted - as a necessary condition for our country to remain in the eurozone and to be able to negotiate further - to further cut public spending by 11.5 billion euros," Finance Minister Yannis Stournaras said. "That position was accepted."

Socialist Pasok leader Evangelos Venizelos said he abandoned demands for some of the cuts to be delayed to avoid bringing down the six-week-old government and forcing new elections.

"If the prime minister believes that the immediate adoption of all the 11.5 billion euros measures will then allow him to negotiate (with creditors) and that only that will secure payment of the next loan instalments and the country's position in the euro, I am obliged to accept his estimate," Mr Venizelos told reporters. "We will not lead the country to elections."

But Mr Venizelos insisted that the new cutbacks should not involve "unfair, across-the-board measures".

He was speaking after two hours of talks with Mr Samaras, a conservative, and Fotis Kouvelis, head of the moderate Democratic Left party. It was their third meeting in less than a week.

Mr Kouvelis said the only agreement was that the government would "make a specific proposal" on the package, without providing any details of when that would happen.

He said party leaders "only discussed chapters and not specific numbers", and pledged to avoid further pain for less well-off Greeks.

International bailout creditors are closely scrutinising the country's lagging austerity and reform programme, and a negative report next month would probably lead to the vital rescue loans being halted.

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