Lagarde, EU, Say Greece May Get More Time

Greece may get more time to reduce its deficit and impose more harsh austerity measures – but not more money – International Monetary Fund chief Christine Lagarde said after a meeting of EU finance ministers in Cyprus.
Prime Minister Antonis Samaras had publicly stated he wanted an additional two years to bring the deficit down from 9.3 to 3 percent as he readies to make another $14.6 billion in cuts but did not ask for it from Greece’s international lenders, the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB.) Greece is surviving on a first series of $152 billion in rescue loans and awaiting the last installment, of $38.8 billion, as well as a second bailout of $173 billion.
Samaras had argued the pay cuts, tax hikes and slashed pensions that came with the loans – more of which he is ready to put on beleaguered Greeks – had worsened the country’s recession, now in its fifth year, with nearly two million people out of work, the economy shrinking 7 percent and with more than 68,000 businesses closed.
With strikes already starting and social unrest rising, the New Democracy Conservative leader Samaras is also facing opposition from his coalition partners, the PASOK Socialists and Democratic Left, which doesn’t want public workers laid off and is uneasy over more pension cuts, although the parties supported austerity before their popularity began to plummet in polls.
Lagarde said Greece may get some breathing room. “There are various ways to adjust: time is one and that needs to be considered as an option,” she told a news conference. The Troika hoped that the bailouts would allow Greece to return to international markets by 2015 instead of relying on foreign welfare aid indefinitely.
EU officials told Reuters that Athens is way behind on its debt-cutting program, suggesting Greece will need funding support past 2014, but at the Cyprus meeting, there was no talk of a third bailout.“There will probably be no more money (for Greece),” Austrian Finance Minister Maria Fekter told reporters.
The EU is anxious to keep Greece from defaulting and being forced out of the bloc of the 17 countries using the euro, fearing that could set off jitters among investors and jeopardize the Eurozone itself.
Juncker said the EU and IMF must decide by the end of October on how to revise the Greek program and said there was no question of Greece leaving the Eurozone. Ministers will meet again in Luxembourg on Oct. 8 to discuss Greece’s finances on the basis of a report expected to be finished by Troika inspectors while Europe’s leaders meet for a summit in Brussels on Oct. 18. “I don’t have the intent to wait until November,” Juncker said.
Greek Finance Minister Yannis Stounaras said: “There is progress in discussions with the Troika, we will try to finalize (that) as soon as possible, to be ready for final decisions at the latest by end of October.”