INTERNATIONAL DEBT inspectors started new talks today with Greece’s month-old government that will determine whether the financially crippled country keeps receiving vital rescue loans or is forced to default and potentially leave the common European currency.
The heads of an inspection team from the European Union, the International Monetary Fund and the European Central Bank met for more than two hours with Finance Minister Yannis Stournaras.
Later today, European Commission President Jose Manuel Barroso will hold talks with Prime Minister Antonis Samaras during his first official visit to Athens since mid-2009, when Greece’s acute financial crisis broke out.
Talks with the EU, IMF and ECB inspectors — commonly known as the troika — will focus on the progress of a program of stringent spending cuts and other austerity measures imposed on Greece as a condition for two international bailouts keeping the country solvent.
More importantly, Greek officials must also convincingly outline how they will save an additional €11.5 billion in 2013 and 2014, while boosting revenues by €3 billion in an effort to reduce the country’s bulging budget deficit. Although the details have not been released, new cuts in public outlays are expected to affect pensions and civil service salaries as well as the health and welfare sectors.
The bulk of the cuts — worth an estimated €5 billion — will be borne by the Labour, Social Security and Welfare Ministry. Minister Yiannis Vroutsis, who will meet troika inspectors next week, has pledged that the cuts will be implemented “as fairly as possible.”
Samaras, whose conservatives head a three-party coalition government, will discuss the proposed cutbacks with his junior coalition partners before his meeting with Barroso. He will meet the troika representatives on Friday.
Greeks have been subjected to harsh cuts in pensions and salaries, coupled with repeated tax increases, for more than two and a half years. Anti-austerity sentiment is strong, and a small left-wing group is planning a protest in Athens against Barroso’s visit later Thursday.
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