Anxiously hoping to hold to his vow not to administer any more austerity measures, Greek Prime Minister Antonis Samaras has instructed his top ministers he is unequivocally opposed to additional pay cuts, tax hikes and slashed pensions and for them to do whatever it takes to make sure he can stick to it.
While there have been some encouraging signs for the economy, particularly a drive toward a primary surplus, debt has risen to 321 billion euros ($424.4 billion) and a number of Eurozone officials believe Greece, which is surviving on $325 billion in two bailouts from international lenders will need a third, but perhaps as little as 10-11.4 billion euros, about $13.22-$15.07 billion.
September is the key month for Greece with envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) returning on Sept. 16 to check progress on reforms and German holding elections on Sept. 22. Chancellor Angela Merkel, who is running for re-election, backs bailouts for Greece but only on condition of austerity and has ruled out any prospect of a so-called “haircut” in which Greece would not pay back all its loans to the Troika.
Samaras is looking ahead and said he doesn’t want austerity measures for the period 2015-16, which would take him to the end of the term of his coalition government that includes his New Democracy Conservatives and his partner and otherwise political rivals, the PASOK Socialists. There are worries that if tax revenues don’t rise enough and there is a hole in the economy that the Troika will ask for more austerity.
The government’s aim is to post a primary surplus later this year which would allow it to return to international bond markets in 2014 with the aim of raising some 3 to 4 billion euros. This sum, together with leftover funds from the recapitalization of the country’s banks and a greater proportion of European Union funding in subsidies might allow Greece to cover a funding gap for 2014 and 2015 estimated at some 10 billion euros.
The major opposition party Coalition of the Radical Left (SYRIZA) said Samaras is waiting in hiding to impose more harsh conditions on Greeks although it was reported that the government is fearful that would bring about early elections as SYRIZA desperately wants.
The Leftists oppose austerity but have no plan to replace the bailout monies that come with it and said they would not fire any workers as the government is planning to do on the orders of the Troika and wouldn’t make any cuts in government spending even though the government is broke and reliant on the loans to keep operating. SYRIZA leader Alexis Tsipras hasn’t said how he would manage to do that beyond saying he wouldn’t.
Tsipras accused the government of failing to “heed the needs of the Greek people and to defend the country’s interests,” and called for elections. “The country needs a SYRIZA government without delay,” he said.
Government spokesman Simos Kedikoglou hit back, accusing Tsipras of lacking alternative proposals to the government’s economic program. “SYRIZA is cursing to cover its political nakedness,” he said.
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