Greece pushes for austerity deal as time runs short

Tue Oct 2, 2012 3:46pm EDT
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By Renee Maltezou

ATHENS (Reuters) - Greece held a new round of talks with foreign lenders to bridge differences over 2 billion euros of disputed austerity cuts on Tuesday, with time running short to clinch a deal before a meeting of euro zone ministers next week.

Athens has been haggling for weeks over 12 billion euros of cutbacks that its European Union and International Monetary Fund lenders have refused to sign off on over fears that some of the proposed savings are unlikely to materialize.

For the second day in a row, inspectors from the "troika" of European Commission, European Central Bank and IMF lenders had to face rows of angry Greeks heckling them as they entered a ministry building to start discussions.

At the labor ministry on Tuesday, dozens of disabled Greeks and their carers blocked the main entrance and chanted "We won't let it pass!" in protest at the cuts. One held a banner saying: "They handed 200 billion to bankers but cut down on medicine, treatment and benefits for the disabled."

The protests came a day after Greece unveiled an austerity budget that predicted a sixth year of recession in 2013 but failed to convince the troika, which has been skeptical of Athens' plans to cut health and defense spending.

"The troika is questioning the effectiveness of the measures related to structural reforms," a government official said, citing planned savings from restructuring entities in health and other ministries.

The official expressed optimism that a deal with the troika would be struck by the end of the week, but a second government source cast doubt on that, saying such an outcome now appeared "difficult".

Finance Minister Yannis Stournaras was non-committal on the issue. When asked by reporters, after a meeting with Prime Minister Antonis Samaras, whether an agreement with the troika could be reached before the EU Summit on October 18, he replied: "We'll see".   Continued...

Students from music schools of Athens hold an anti-austerity rally in Athens October 2, 2012. The words on the posters read, "Do not ignore the education". REUTERS/John Kolesidis