Greece readies more cuts

Details of Greece’s EUR 11.5 billion (USD 14.2 billion) austerity plan are emerging as Prime Minister Antonis Samaras moves to de­mon­strate his government is serious about cost-cutting efforts ahead of meetings with European leaders later this week. Although the specifics of the cutbacks still remain a work-in-progress, senior government officials have made clear that the new measures will include across-the-board cuts in pension benefits – a politically sensitive issue – as well as wage reductions and layoffs in the broader public sector, Hotnews.ro informs, quo­ting Wall Street Journal. The general outline of those budget cuts will be presented by Mr. Sa­maras on Wednesday to Luxembourg’s Prime Mi­nister and Eurogroup chief Jean-Claude Juncker, who will arrive in Athens for a one-day visit. On Friday, in his first high-level talks since he took office in June, Mr. Samaras will travel to Ber­lin to meet German Chancellor Angela Mer­kel and a day later in Paris he will meet French President François Hollande. Since getting elected after two fiercely fought and highly divisive election campaigns in May and June, Mr. Samaras has been working to bridge differences with his coalition partners and Greece’s international lenders over the right austerity mix that will allow the country to receive a EUR 31 billion aid installment. The budget cuts are seen as a quid-pro-quo for what Mr. Samaras and his government coalition partners really want: Europe’s approval of a two-year extension in Greece’s deficit targets. That would ease the pain of Greece’s adjustment program, which has pushed the economy into a recessionary tailspin, but it would also mean that international creditors would have to provide Greece with even more funds on top of the EUR 173 billion bailout it has already received. As it is, Greek go­ver­­nment officials have already signaled that there is more pain in store for the public: more than a third of cost savings the country is planning over the next two years- about EUR 4 billion – will come from further reductions in wages and pensions.