Belfast Telegraph

Greeks agree £9bn in cuts

Coalition accepts new measures to keep country in euro

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 €11.5bn (£9bn) 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 €11.5bn 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 in the beleaguered country.

"If the prime minister believes that the immediate adoption of all the €11.5bn 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 continuing to closely scrutinise the country's lagging austerity and reform programme and should they produce a negative report next month it would probably lead to the vital rescue loans being halted.

That would leave the government unable to pay pensions, salaries and service its debts, which in turn could force Greece to abandon Europe's common currency, unleashing a global market tsunami.

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