On the heels of the International Monetary Fund (IMF) admitting it vastly underestimated the effect of austerity measures in Greece demanded as part of bailouts, Prime Minister Antonis Samaras will have to negotiate tough new terms with the country’s lenders this week.
Envoys from the Troika of the IMF, European Union and European Central Bank are set to return to Athens on June 11 to check progress in a number of areas as Samaras’ coalition partners are pushing him to shake up his cabinet.
Before that,, Samaras was is scheduled to meet Luxembourg Prime Minister and former Eurogroup chief Jean-Claude Juncker, who described Samaras as “a brother” in comments to the German Stock Exchange’s news website last week, and hailed the Greek premier for doing an “excellent job” with reforms, condemned the European Commission for its forecasts on the Greek crisis over the weekend, noting that they had “no link with reality.”
Samaras hasn’t uttered a word about the IMF’s admission that it erred badly in miscalculating the effects of repeated pay cuts, tax hikes and slashed pensions, but Greece’s former representative to the IMF, Panayiotis Roumeliotis, blamed former Prime Minister George Papandreou’s administration for failing to demand a cut in Greece’s huge debt from the outset. “The Europeans were unbelievably slow in taking decisions but we did not rise to the occasion either; we did not seek a reduction of Greece’s debt,” he said.
Kathimerini reported that sources in Athens and Brussels were trying to spin the IMF’s report after a hail of criticism, claiming that it is less of a “mea culpa” than an attempt to put pressure on Eurozone leaders to accept a haircut on loans to Greece.
The prospects for a haircut are not officially on the agenda of talks between Finance Minister Yannis Stournaras and Troika envoys. The talks are expected to focus on progress in reform efforts – chiefly the streamlining of the civil service and an overhaul of the tax system – as well as an anticipated funding gap of 4.6 billion euros ($6.08 billion) for 2014 and what measures will be taken to plug it.
Alongside the Troika talks, Samaras is expected to meet with his coalition partners, the PASOK Socialists and tiny Democratic Left (DIMAR) who are reportedly set to press for changes to the administration’s policy program. The prospects for a reshuffle are likely to be discussed, though Samaras is reportedly keen to put off changes until the fall as ministers still have reforms to push through, the paper reported.
SYRIZA leader Alexis Tsipras attacked for pursuing austerity policies imposed by international creditors. “Although (Greece’s) lenders admit the program’s flaws, the premier’s insistence on implementing the catastrophic memorandum shows that he is out of touch with reality,” the party said in a statement.
It added that recent developments are a “vindication for SYRIZA,” and that “Samaras’s talk of ‘success story’ has become the briefest joke.”
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