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Greece on edge over austerity

business Updated: Oct 23, 2012 22:10 IST

AFP
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Greek Prime Minister Antonis Samaras was set for critical talks with coalition allies later on Tuesday to finalise an austerity package tied to the next installment of EU-IMF rescue loans after months of tough bargaining. “It is a crucial day,” government spokesman Simos Kedikoglou said.

Samaras, a conservative, will confer with his socialist ally Evangelos Venizelos and moderate leftist Fotis Kouvelis, both of whom have expressed misgivings about the scope of the cuts demanded by creditors.

Greece recently pledged €7.8 billion ($10.2 billion) in cuts next year, only to be told by the so-called ‘troika’ of lenders — the EU, IMF and the European Central Bank — that an effort of €9.2 billion is required to counterbalance recession. Agreement is needed to give Greece access to a loan slice of €31.2 billion, that is a part of its EU-IMF rescue package.

The government has also agreed to cut higher pensions and raise retirement age for the second time in two years.

The conditions have been laid down by the International Monetary Fund, the European Union and European Central Bank.

Talks with this so-called troika have dragged on since July, and although Greece has bridged the financing gap by selling short-term debt, Samaras last week warned that the country will run out of money on November 16.

Greece must redeem short-term debt worth €6.6 billion by mid-November.

Finance minister Yannis Stournaras this week had said in parliament that “people will go hungry” if Greece fails to secure the loan payment.