Calamos Supports Greece
GreekReporter.comGreek NewsEconomyJuncker Wants Greece in Eurozone But No Reassurances

Juncker Wants Greece in Eurozone But No Reassurances

With growing indications that Greece may have to make even deeper cuts than the $14.16 billion demanded by international lenders, Eurozone chief Jean-Claude Juncker told Prime Minister Antonis Samaras that Greece should stay in the economic bloc, but said it depends on a report from inspectors checking to see if the government is carrying out reforms as promised.
In a meeting in Athens ahead of Samaras’ swing later in the week to Berlin to meet German Chancellor Angela Merkel and French President Francois Hollande in Paris, Juncker said Greece’s fate depends on whether Samaras fulfills commitments to the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB.)
Samaras has been hinting that he wants Greece to have two more years to impose more cuts and austerity measures but hasn’t said he will ask for it, and EU leaders are growing impatient with two years of broken promises by a series of Greek governments.
Juncker, who heads the 17-country Eurozone of those using the euro as a currency, insisted he wants Greece to stay in the bloc because an exit could complete the Greek collapse and threaten the region. “I’m totally opposed to the exit of Greece from the Eurozone,” he said after meeting Samaras and Finance Minister Yannis Stournaras. Juncker said that any lengthening of the adjustment period “will depend on the finding of the Troika mission,” referring to the results of inspections of Greece’s books.
Meanwhile, the Financial Times reported that Samaras’ uneasy coalition government, consisting of his New Democracy Conservatives, the PASOK Socialists and Democratic Left, may need to make $16.9 billion in cuts, some $2.76 million more than anticipated, although there are fears it could reach $18.7 billion, the amount the government has identified. Much of that would come from yet more pay cuts, tax hikes and a fourth round of slashed pensions that would push many elderly below the poverty line, with some auxiliary pensions to be eliminated while tax evaders owing the country $70 billion continue to escape.
A senior official told the Financial Times that if the cuts are carried out that Greek primary budget expenditures would be the lowest in the Eurozone as a percentage of Gross Domestic Product, a humiliating comedown. Greece is trying to cut its budget deficit to 3 percent of GDP in two years, from 9.3 percent now. Samaras wants a two-year extension because he said the austerity measures have worsened a five-year recession that has seen unemployment hit 23.1 percent – 54.9 percent for those under 25 – and is set to shrink the economy by 7 percent. Greece has lost 25 percent of its GDP in five years.
“The economy will not be able to bear the burden of such huge spending cuts in 2013 and 2014. If there is no extension, economic activity will be depressed and it will be very difficult for any government to survive,” said another government official. The government is also considering laying off 40,000 state workers at reduced pay and firing them within a year.
A senior Greek banker said it’s so bad in Greece now that there are nearly 1.2 million people not working compared to 3.8 million with jobs. “We have to be reasonable,” he said. “The model where 30-40,000 people swell the ranks of the unemployed every month because of tax hikes and wage and pension cuts, so that creditors are being repaid 100 per cent on the euro, cannot be sustained for long.” Despite the doomsday scenarios, most analysts expect Greece to stay in the Eurozone and do whatever it takes – including more Draconian cuts – because Samaras can tell Greeks the alternative is catastrophe.

See all the latest news from Greece and the world at Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!

Related Posts