ATHENS (Reuters) - Greek Prime Minister Antonis Samaras sought on Monday to bridge differences with the country’s lenders over a near 12-billion-euro austerity package, after they rejected parts of the plan that Athens hopes will unlock further aid payments.
The “troika” of inspectors from the European Commission, the European Central Bank and the International Monetary Fund rejected unspecified aspects of the plan prepared by Samaras’s government when talks between the two sides resumed Sunday.
The inspectors, who returned to Athens after a month-long hiatus, must approve the cuts if Athens is to get a green light for the bailout money it needs to avoid bankruptcy.
Samaras met the inspectors for further talks on Monday.
On Sunday, the junior partners in the premier’s fragile three-party coalition warned troika officials against pushing austerity too far, saying that low-income pensioners and civil servants must be spared as much as possible.
“Our European partners must realize that the Greek people can’t take it any more,” moderate leftist leader Fotis Kouvelis told reporters after meeting Samaras.
A Greek source familiar with the matter said the troika felt a string of proposed measures worth about 2 billion euros, such as cutting public sector operating expenses, were too vague.
Visiting Athens last month, Eurogroup chief Jean-Claude Juncker had warned the Greek government that the budget cuts needed to be “credible and verifiable”. Finance Minister Yannis Stournaras played down the inspectors’ objections, saying only a “few” measures had been rejected.
Partly due to steep austerity measures taken since its first bailout two years ago, the Greek economy is expected to contract by about a fifth in the 2008-2012 period, making this the country’s worst postwar recession.
Unemployment has soared to a record high, with almost one in four without a job.
Angry pensioners, policemen, judges and civil servants - expected to be particularly hurt by the cuts - are reading strikes and demonstrations to signal their opposition.
In the first major protest, about 15,000 trade unionists and leftists marched on Saturday at an annual fair in Greece’s second biggest city Thessaloniki.
Last week, about 4,000 police, coastguards and firemen staged faked suicides on gallows they placed outside the finance ministry and parliament to symbolize the pain of budget cuts.
Samaras is also under pressure from his other ally, Socialist PASOK chief Evangelos Venizelos, who wants him to stick to a pre-election pledge to obtain two more years’ grace from the troika to implement the cuts slated for 2013 and 2014.
But mindful of the lenders’ exasperation with Greece’s history of broken promises, Samaras has pledged to first deliver on commitments in the bailout before seeking any concessions.
Greece faces bankruptcy and a potential euro zone exit without the next tranche of aid, an issue that European leaders are expected to decide on next month.
Writing by Harry Papachristou; Editing by John Stonestreet