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Greek Coalition Uneasy Over Taxes, Immigrants

Greek Prime Minister Antonis Samaras’ uneasy coalition government is showing signs of strains again, barely days after it won pending approval of the release of a series of $56.7 billion in loans from international lenders, with disputes over ending tax breaks for families and a plan to suspend citizenship rights for immigrants.
Finance Minister Yiannis Stournaras will be in Brussels on Dec. 3 for a meeting of the Eurozone to explain the government’s plan to buy back 13 billion euros ($16.8 billion) in bonds at 30 percent of their value in a bid to write down 20 billion euros ($25.8) billion in debt. That has drawn resistance from investors, although Samaras said the country’s ailing pension funds would be exempt.
The government delayed again the release of bank results, who are waiting for a 50 billion euros ($65 billion) recapitalization until the bond buyback scheme is completed, which is necessary to trigger release of the coming loans that are part of a second bailout of 130 billion euros ($172 billion) in a second bailout. The country had been surviving on  first series of 109 billion euros ($152 billion) in rescue loans.
Stournaras is also backpedaling in the face of resistance from the PASOK Socialists and Democratic Left, who are partners with Samaras’ New Democracy Conservatives. The Leftists are upset with the ending of tax breaks for large families, self-employed professional and farmers, even though they supported them as part of a $17.45 billion spending cut and tax hike plan that narrowly passed Parliament last month after defections from some coalition lawmakers. Even some New Democracy lawmakers may break party ranks, the newspaper Kathimerini reported.
Stournaras said he may accept changes, but only if an equivalent amount of savings could be made elsewhere, which could upset supporters of other programs that would then be targeted. Kathimerini said that the government wants to finish with the bond buyback and secure crucial funding so the focus can shift to the repayment of state arrears and the acceleration of privatization projects.
A cabinet reshuffle is expected before Christmas with PASOK and Democratic Left expected to appoint several cadres to key posts. Certain ministers who are resisting reforms – such as Administrative Reform Minister Antonis Manitakis who opposes a fast-track redundancy scheme for civil servants – are likely to go, the paper said.
It added that there are fears that if all does not go according to plan and the government finds itself forced to take new austerity measures early next year, the coalition will buckle under the strain and snap elections will be called. Samaras swore that the coming pay cuts, tax hikes and slashed pensions would be the last but has reneged on a series of promises since being elected.
The major opposition party, Coalition of the Radical Left (SYRIZA) which is leading in opinion polls and opposes the terms of Greece’s foreign bailouts, is planning for such an eventuality with speculation about elections featuring at its party congress over the weekend.
The Samaras government has also frozen the application procedures of immigrants seeking citizenship as he seeks to repeal the law that allows them to become citizens if they meet certain criteria, including at least six years in Greek school. Before the June 17 elections, he said he wanted all illegal immigrants out of the country and the police have been rounding up thousands of immigrants in the search for those in the country unlawfully.
PASOK and the Democratic Left, who are set to be rewarded for backing austerity measures with appointments as ministers in the coming Cabinet reshuffle, were said to be upset with changes in the immigrant citizenship law but not enough to block it.

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