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Stournaras Pushes to Wrap Up Troika Deal

Greek Finance Minister Yiannis Stournaras said he hopes he can conclude negotiations with international lenders this week on a long-delayed $17.45 billion spending cut and tax hike plan that is needed to release a locked loan installment the country needs to pay its workers and pensioners and recapitalize banks pushed to the brink when a former government imposed 74 percent losses on investors and institutions holding Greek bonds.
In an interview with the business newspaper Imerissia, he said he would push envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) to reach agreement on the last disputed segments of the plan he put together for Prime Minister Antonis Samaras’ uneasy coalition government that is backing more austerity.
“We have completed 90 percent of the road for the payment of the loan installment… we have almost reached the end and now we have to give answers to the subjects that are still outstanding,” he said. “It would be a waste of all this national effort if we don’t succeed,” said Stournaras, who was in Brussels on Oct. 18-19 with Samaras for an EU summit.
Stournaras has been holding talks since the end of July with the Troika, which his holding back a $38.8 billion installment from a second bailout of $173 billion until more reforms and budget cuts and tax hikes are approved. The plan set off three general strikes and protests from Greeks in a month, and another strike is set for Nov. 14 – two days before Samaras said the country will run out of money unless the Troika releases the loan.
The money is “vital” for Greece and is “crucial to get the economy moving again” and “meeting recurrent expenditure” such as pensions and wages, according to government spokesman Simos Kedikoglou interviewed on public television. In Brussels, Samaras said he was confident about the payment of the next installment by “the end of November” and about the adoption by the Greek Parliament of new savings for the 2013-14 budget.
He said he was pleased by the “positive” statement by euro zone leaders who hailed Greece’s achievements in carrying out reforms aimed at getting its economy back on track and urged Athens to keep up efforts to stay in the Eurozone. While agreement has been reached that most of the savings will come from cuts in wages and pensions, talks are deadlocked on the steps to increase labour market flexibility demanded by the troika.
The head of the IME, an organization representing small and medium-sized businesses, blamed the three-monthly visits by the troika for a loss of almost two billion euros for his members. “We have calculated at 1.9 billion euros ($2.47 billion) the fall in demand during some 15 visits by troika representatives since 2010,” Vassilis Korkidis, President of the IME, told a radio station. The visits, to discuss austerity measures with the government “affect the psychology of consumers and lead to a drop in demand and turnover in retail trade,” he said.

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