Greece struggling to stay in the eurozone

Between 11.5 and 14 billion to be recovered, Samaras in Berlin

20 August, 20:01

Greece struggling to stay in the eurozone Greece struggling to stay in the eurozone

(ANSAmed) - ATHENS - Today begins a crucial week for the future of Greece in Europe, while the German pressure on Athens is not diminishing. Tomorrow the responsibles for the Greek Ministry of Finance will announce the areas in which they will operate cuts in public spending, 11.5 billion - or even 14, according to other sources - required by the troika (EU, IMF and ECB), aimed at obtaining more aid from international lenders.

Wednesday the President of the Eurogroup, Jean-Claude Juncker, will arrive in Athens for talks with Greek Prime Minister Antonis Samaras who will leave for Berlin next Friday to meet with German Chancellor Angela Merkel. Samaras goal is to obtain a two-year extension in the roadmap to gain time to bring down the deficit to below 3% of GDP.

But the German government has already made known that the meeting will be "interlocutory" and no fundamental decisions will be taken on the future of Greece. It has not to be expected that the meeting with the Chancellor "would possibly prepared the ground for essential decisions" said the German government's spokesman Steffen Seibert. "Minister Westerwelle has already made clear that there will be no softening of agreements made with Athens, "added the spokesman, reiterating the position of Guido Westerwelle, expressed in the weekend. Westerwelle, after a meeting today with the Greek fellow Dimitrios Avramopoulos, said that the German government "wants Greece to remain part of the Eurozone and works toward that end". A concerned opinion has been expressed to the German newspaper Frankfurter Rundschau by Joerg Asmussen, a German member of the Board of the Central European Bank, and considered a "hawk" within the institution of Frankfurt. According to Asmussen, the output of Greece from the Eurozone would be "manageable," but "very expensive." In Athens, meanwhile, the package of measures required by the troika to cut public spending in the 2013-2014 period is almost ready. In the package, according to sources from the Ministry of Finance, there are significant wage cuts in the public sector pensions and a reduction of 34,000 units of government employees. Before being presented in the Parliament to be voted, the proposed measures shall be approved by the leaders who support the government coalition, such as premier Samaras, the Socialist Evangelos Venizelos (PASOK) and Fotis Kouvelis (Democratic Left).

Most of the cuts, about four billion, will be performed on pensions and social security benefits. Some of the latter, in particular, will be reduced and other entirely eliminated. The government is also expected to introduce strict criteria requirements for the determination of income for those who will be entitled to benefits in the future.

With regard to pensions, it seems that the government should yet decide on the criteria to be used to operate the cuts, which should be a minimum of 2% to a maximum of 15%. In all cases, the pensions of 700 euros per month should not suffer reductions while those complementary could be even reduced by 35%. That plan will be the fourth cut made by the government in Athens in 2010, year in which Greece signed the first memorandum with the troika. Since then, pensions have already been reduced by 40%.

Heavy cuts are also anticipated to the remuneration of employees of public companies - known as Deko - and it may be between 30 and 35%. The average annual income of an employee at Deko is currently 31,000 euros but it will be reduced to about 21,000.(ANSAmed).


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