Troika Won't Back Down on Greek Austerity

International lenders are not relenting on demands that the Greek government push ahead with combined package of $17.45 billion in spending cuts and tax hikes, leading to further delays before it can be sent to Parliament and open the door for a pending $38.8 billion loan installment needed to keep paying workers and pensioners.
Envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) who met with Finance Minister Yiannis Stournaras and Prime Minister Antonis Samaras reportedly rejected some 2 billion euros, or $2.58 billion in projected savings in the budget blueprint and the deal can’t be finalized until an agreement is reached.
The projected savings in cuts the Troikas hasn’t accepted yet are reportedly in the areas of health, defense and local authority funding. In the meantime, a draft budget for 2013, outlining 7.8 billion euros or $10.08 billion, has already been submitted to Parliament, which is controlled by the coalition government of Samaras’ New Democracy Conservatives, the PASOK Socialists and Democratic Left, all of whom have reneged on campaign vows to hold the line on more pay cuts, tax hike and slashed pensions the Troika has insisted up before releasing more monies, including a $172 billion second bailout.
Samaras’ meeting with the Troika troops lasted only 35 minutes, leading to speculation that there was a deadlock, although the newspaper Kathimerini reported that sources in the Prime Minister’s office denied it, as they did with another report that he called European Commission President Jose Manuel Barroso and European Union President Herman Van Rompuy to ask for their political support in the talks.
The government hopes to wrap up talks this week so that the Parliament can rubber stamp it in time for an Oct. 8 meeting of finance ministers of the Eurozone, the 17 countries that use the euro as a currency.
Other sticking points remain, including the continuing reluctance of PASOK leader Evangelos Venizelos and Democratic Left head Fotis Kouvelis to go along with the suspension of 15,000 public workers, although they had reportedly given in to Samaras’ insistence on supporting the overall budget plan for 2013-14.
The fact that several sticking points remain in talks with the troika, including over the proposed suspension of 15,000 civil servants which the two junior partners in the coalition vehemently oppose, suggests that a deal within the next few days is unlikely, putting the whole process back.
As it stands now, the government projects cuts of

• $4.91 billion in pensions, the fourth time benefits for the elderly would be cut
• $1.42 billion in public worker salaries, which have already been cut 30 percent and more
• $1.034 billion in social welfare benefits
• $1.55 billion in health, defenses and local authority spending

The draft, which is expected to be significantly revised, foresees the economy contracting by 6.5 percent this year and 3.8 percent next year while unemployment is set to rise to 24.7 percent from 24.1 percent this year. It also predicts a primary surplus of 1.1 percent of Gross Domestic Product (GDP) next year following a row of deficits since 2002, but Greece has missed every projected target in the last few years.