Brussels, le 26/07/2012 (Agence Europe) - “The European Commission will stand by Greece”, announced the president of the European Commission, José Manuel Barroso, after a meeting on Thursday 26 July 2012 with Greek Prime minister Antonis Samaras adding that words must be followed by action, and the Greek authorities must meet their commitments, particularly on privatisation. Samaras said his government would be standing by the terms of the international aid programme. Barroso recognised the sacrifices made by the Greeks, pointing out: “Some of the efforts may seem unfair, but the alternative would be much more difficult”. Barroso announced that €12 billion would be forthcoming from the EU structural funds to create growth and jobs. “We are all in the same boat”, he added.
Samaras to meet troika fact-finders on Friday.
On Thursday morning, Greek Finance Minister Yannis Stournaras put the finishing touches to the new austerity plan with a delegation from the troika of lenders (European Commission, European Central Bank and International Monetary Fund) in a meeting that lasted more than two hours. Sources at the Greek Finance Ministry told this newsletter that “the proposal for the €11,5 billion savings is complete. It has not yet been given to the representatives of the troika. It first has to be approved by the political leaders. There's good will on both sides to find the best solutions”. The coalition government headed by Antonis Samaras put its skates on and had the package of cuts endorsed that same afternoon.
Athens will have to make savings of €11.5 billion over the next two years, as demanded by its international lenders. The government will also have to find an extra €3 billion of government income. Government sources quoted by Associated Press say the troika did not ask for any further cuts this year. The details of the cuts are not yet known, but the most likely areas for savings are pensions, public sector pay and healthcare. The austerity measures have already been criticised by the Greek trade union confederation CSEE in a press release, describing the cuts as “unfair and ineffective” and hit “those who have already made the most sacrifices”. In addition to the planned cuts, the Greek authorities on Wednesday evening announced the sale of struggling Greek bank ATEbank, which Reuters says needs €5 billion extra capital. June was a difficult month for Greek banks, with a reduction in cash deposits, according to ECB statistics published on Thursday. Cash deposits slumped by 5% to their lowest level in more than six years.
Athens says it is determined to stick to the targets set by its lenders, but there has been renewed talk in Germany about Greece leaving the euro. On Thursday, Citigroup said there was a 90% chance of Greece having to leave the single currency over the next 12 to 18 months. On the same day, IFO said that Greece leaving the euro would cost Germany up to €82 billion and France up to €62 billion.
At a press conference in Washington on Thursday evening, the IMF said it was too soon to comment on the outcome of the troika's fact-finding mission because discussions would be continuing over the summer. (EL/transl.fl)