Monday, October 1, 2012

Greece's Creditors Look Askance at Cutbacks

Wall Street Journal
October 1, 2012

Greece's international lenders cast doubt on parts of Athens' plans to save billions of euros through new cutbacks and tax measures, throwing a potential wrench in the government's efforts to reach a quick deal to unlock new aid for the country.

The troika of Greece's international inspectors—the European Commission, the International Monetary Fund and the European Central Bank—rejected as much as €2 billion ($2.57 billion) of austerity measures, a senior finance ministry official said.

"They have asked for clarifications, which we are providing," Finance Minister Yannis Stournaras said after the inspectors met with Greek Prime Minister Antonis Samaras. "Talks are continuing,"

The measures questioned by the troika were part of some €13.5 billion in savings for 2013 and 2014 that the leaders of Greece's coalition government agreed upon last week and presented as a fait accompli.

On Monday, Greece presented the first half of that two-year plan, the 2013 budget, to Parliament. Next year's budget details some €7.8 billion in cuts to be taken next year, with the lion's share—almost €5 billion—coming from further trims in pensions and public-sector payrolls.


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