Brussels, 18/11/2011 (Agence Europe) - The new technocrat prime ministers of Greece and Italy, Lucas Papademos and Mario Monti, will travel to Brussels next week for talks with the President of the European Council, Herman Van Rompuy, and the President of the European Commission, José Manuel Durão Barroso.
On Monday 21 November, Lucas Papademos, who has been given assurance by the Greek parliament that it will back the agreement reached by the eurozone on 26/27 October on the second Greek bailout (see EUROPE 10483), will be in Brussels for a meeting of Eurogroup. Greece's budget for 2012 was unveiled on Friday 18 November and foresees a budget deficit of 6.7% of GDP but this does not include the planned write-down of the country's debt, which will reduce interest payments. Greece is expected to have a primary budget surplus, in fact, of 1.1%. This year, however, the public deficit will reach 9% of GDP, higher than the 7.5% target set out in the bailout programme. Eurogroup is already calling for further austerity measures in 2013 and 2014.
Europe wants Greek politicians to back the 26-27 October deal in writing, promising to introduce the austerity measures no matter who wins the election. This has been made into a precondition for the payment of the next instalment of aid (€8 billion) so that Greece can pay its bills in December. The chair of Eurogroup, Jean-Claude Juncker, reminded the European Parliament of this necessity earlier in the week. “In the spirit of 'trust and verify' the Greek political parties have to make a clear and unequivocal choice in writing: are they with us, or not? We don't have the luxury of patience any longer,” Dutch Finance Minister Jan Kees de Jager said, but the leader of the Greek conservative New Democracy party, Antonis Samaras, refuses to comply.
Italy. On Tuesday, the new Italian prime minister, Mario Monti, who has just won a vote of confidence in the Italian parliament, will present European leaders with an action plan to reduce Italy's €1.9 trillion debt (currently standing at 120% of GDP) through cuts in public spending, economic growth and social fairness. Planned measures include privatisation, reform of pensions and labour market rules, cutting the civil service and politicians' expenses and clamping down on the black economy. Monti rejected the idea that Italy was the weak link in the euro. He will be meeting the Germany Chancellor, Angela Merkel, and the French President, Nicolas Sarkozy, at a mini-summit. Sarkozy initially planned to go to Rome with Merkel in support of the new PM, but the idea was later dropped. (MB/transl.fl)