22 August 2012
Last updated at 15:07 GMT
Prime Minister Antonis Samaras is under pressure to convince the eurozone leaders of Greece's efforts
Greece's
Prime Minister, Antonis Samaras, is preparing for the first of a series
of meetings in which he will ask the country's lenders for more time to
implement spending cuts and reforms.
Mr Samaras is set to tell Eurogroup finance chief Jean-Claude Juncker that the country needs "breathing space".
German Chancellor Angela Merkel said no decision would be made this week.
She is due to meet Mr Samaras on Friday, while French President Francois Hollande will meet him on Saturday.
"We wait for the report of the troika," Chancellor Merkel
said, referring to Greece's lenders, the European Union, the
International Monetary Fund (IMF) and the European Central Bank, who
will assess next month whether the country is doing enough to meeting
the conditions of its bailout.
At issue is whether Greece has done enough to receive its
next instalment of loans worth 31.5bn euros ($39.3bn; £24.7bn) that it
needs to avoid defaulting on its vast public debts, and possibly even
leaving the euro.
Under the terms of the bailout agreement, Greece needs to
demonstrate it can find 11.5bn euros in public spending cuts within two
years in order to qualify for the money.
At the talks with Mr Juncker, Mr Samaras is expected to float
the idea of Greece being given a two-year extension to the deadline.
'Growth needed'
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Analysis
Jonty Bloom
Business correspondent, BBC News
The eurozone crisis can feel like watching a road crash in slow motion, very slow motion.
The Greeks are still lobbying hard for more time to find the
cuts that are necessary if it is to win the next tranche of
international aid that it desperately needs.
And as the traditional torpor of the balmy Mediterranean
summer holidays begins to draw to a close politicians are returning to
their desks in the continents' capitals and enquiring about the health
of the eurozone.
As the poet said: "Across the wires the electric message came: 'He is no better. He is much the same.'"
And that is the problem the crisis in the eurozone has been
pretty constant for years now, no treatment seems to make it better, but
the illness doesn't seem capable of killing the patient either.
But quietly things may be coming to a head.
The Greek government will be desperate for a positive report
from the troika as it knows full well that the willingness of northern
Europeans to give it more time and more money is wearing thinner and
thinner, and the longer the crisis continues the more time they have had
to prepare for a Greek exit.
The real danger for the Greek government is that the rest of
the eurozone decides that, upon reflection, they could survive without
Greece after all.
He will argue that Greece has
lost time because of elections this year, and that it should be allowed
to move more gradually in order to ease the economic pain felt by the
Greek people, the BBC's Mark Lowen reports from Athens.
"Let me be very explicit: we demand no additional money. We
stand by our commitments," Mr Samaras told German tabloid Bild in an
interview published on Wednesday.
"But we have to kick-start growth in order to cut our
deficit. All that we want is a little 'breathing space' to revive the
economy quickly and raise state income."
There are also reports that due to the worsening state of the
economy, which affects tax receipts and welfare spending levels, Greece
may now need to find savings of up to 13.5bn euros, 2bn more than
thought.
A government source told our correspondent that Mr Samaras
would not press the issue of an extension too hard, fearing it might
cause bad blood with the group of lenders that monitors Greece's
bailout.
Speaking to the BBC, Yannis Varoufakis, professor of
economics at the University of Athens, said Mr Samaras was "profoundly,
deeply and sadly wrong".
"Greece does not need more breathing space. It is not breathing at all," he said.
He added that the solution Europe had implemented to tackle
Greece's insolvency crisis was a "very silly one" - providing gigantic
loans "on condition of austerity measures that would shrink the national
income from which that huge loan would have to be repaid", requiring
yet more loans and more austerity.
Worsening situation
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“Start Quote
If I had saved all those payments in a bank account I would be rich by now; where has it all gone?”
'Leo'
Greek pensioner
According to Constantine
Michalos, president of the Athens Chamber of Commerce, the breathing
space Mr Samaras wants is political rather than economic, as having
extra time to repay may make the country's problems worse.
"Whether it is two or three-year extension, that would mean
that there is an additional bill in terms of interest," he told the BBC.
"What is the point of extending the total bill in terms of
the total debt, when you haven't got in place the right mechanisms to
stimulate the economy, to return to the path of growth that you in need
to in order to be able to finance the debt that you are trying to
service?" he asked.
He said it would be "extremely difficult, if not impossible",
to find savings of 11.5bn euros in time, as Athens was starting to
implement the measures too late.
"Lay-offs [in the public sector] should have started gradually two years ago.
"Now we need to have 150,000 lay-offs by the end of next
year. In terms of social cohesion it is going to be an extremely
difficult September coming up," Mr Michalos said.
Europe presses ahead
Continue reading the main story
Greece discussions timetable
- 22 August: Greek PM Antonis Samaras meets Eurogroup chief Jean-Claude Juncker
- 23 August: Angela Merkel and Francois Hollande meet
- 24 August: Chancellor Merkel and PM Samaras meet
- 25 August: President Hollande and PM Samaras meet
- Early September: Troika staff go back to Greece
- 14-15 September: Gathering of European finance ministers in Cyprus
- Troika's review of progress to be published by the end of September
- 8-9 October: Finance ministers attend two days of meetings in Luxembourg
Eurozone leaders have so far
resisted any move to soften the bailout conditions, especially in
Germany, where the government is under pressure not to make any more
concessions.
"We have clear agreements between the troika and Greece, and
Greece has to fulfil these agreements," Michael Fuchs, deputy chairman
of the parliamentary group of Germany's governing CDU party, told the
BBC.
He said it looked as though Greece had not been able to
fulfil its promises, such as privatising 50bn-euros worth of state
assets.
"If the troika tells us they did what they have to do then of
course we will [continue with] the programmes. If not it is very
difficult," he said.
But BBC Berlin correspondent Stephen Evans says Germany did have some room for manoeuvre.
Publicly, Germany is saying it cannot put money into a
bottomless barrel, which is not quite saying that if there is any
slippage there will not be any more money, our correspondent says.
The heavily-indebted country has received two massive EU and
IMF bailouts - one for 130bn euros this March and one for 100bn euros in
May 2010 - to allow it to continue payments on its vast public debt and
stay in the eurozone. Copy http://www.bbc.co.uk/n
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