ATHENS – Greek Prime Minister Antonis Samaras and his coalition partners missed their own deadline on July 30 to reveal the details of a $14.16 billion savings plan demanded by international lenders to keep rescue loans coming as the talks were expected to continue for several more days, leaving anxious Greeks uncertain what is coming next for them after previous waves of pay cuts, tax hikes and slashed pensions.
Democratic Left leader Fotis Kouvelis told reporters that he, Samaras, and PASOK Socialist leader Evangelos Venizelos didn’t even discuss how to close a remaining $2.5 billion hole in a previously outlined plan to make the cuts insisted upon by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is holding back a second bailout of $173 billion until the government reaches a consensus. Kouvelis said instead that the leaders talked about the social problems that the austerity measures they support have caused, worsening a five-year-recession, putting nearly 1.1 million people out of work, shrinking the economy by 7 percent and closing 1,000 businesses a week.
Kouvelis denied the talks had broken down and said, “There’s a dead end when someone disagrees,” and said they had reiterated their support for a secret budget-cutting plan they have not yet revealed. Troika officials who were in Athens to meet the leaders and go over the country’s books said they would stay until the Samaras government finalizes the cuts.
Venizelos said Greece needs to more rapidly implement a privatization plan he delayed when he was Finance Minister in a previous government and called for national unity in a nation deeply divided over the pay cuts, tax hikes and slashed pensions the government has imposed to satisfy the Troika that foreign bankers and private investors will be paid back first.
Greek media has reported, however, that the government will go back on its word not to mandate more austerity and plans to cut pensions, slash a lump sum by 22.6 percent that pensioners have had taken out of their salaries for decades for their retirement, and was even considering putting a cap of $1,840 a year on health care, which one patient group said would mean only the rich could afford coverage in Greece and the poor would be left to die.
If the government does not make the cuts, the Troika has warned it would hold back a $38.8 billion loan installment in August, without which Greece cannot pay back creditors a $4 billion loan and would not have enough money to pay workers and pensioners. The country has already mostly stopped paying its bills as tax revenues have fallen despite big tax hikes because beleaguered Greeks have cut their own spending deeply. Also under consideration is layoffs of contractors in the public sector, a cap on pensions, cuts in welfare benefits, reductions in tax exemptions, and lower salaries for public employees as well as raising the retirement age by a year to make up for the shortfall in savings.
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