Finance Minister Yannis Stournaras, who once said Greece didn’t need debt relief, on April 28 confirmed that it does and that the government next week will begin the process of asking international lenders to restructure 240 billion euros in two bailouts.
Greece wants lower interest and a longer time to repay but it wasn’t said if that will also include asking the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) to take a so-called “haircut” and write off a big chunk of what Greece owes.
That would force taxpayers in the other 17 countries of the eurozone to pick up the bill for generations of wild government overspending.
The first step will take place before the Eurogroup, the financial bloc’s finance ministers, to show good news to coincide with Prime Minister Antonis Samaras’ campaign ahead of May 17 elections for Greek municipalities and those for the European Parliament a week later.
Facing a stern challenge from the main opposition Coalition of the Radical Left (SYRIZA), Samaras is counting on convincing Greeks he has brought stability.
He has vowed to turn back 70 percent of a 1.5 billion euro primary surplus to a few groups affected by harsh austerity measures he imposed on Troika orders, but not all.
Samaras’ strategy is also to turn toward trying to create growth after big pay cuts, tax hikes, slashed pensions and redundancies during a deep economic crisis have created record unemployment and growing poverty and left as many as three million people without healthcare, none of them politicians or the rich.
“The road for a discussion on debt relief is open,” Stournaras told a Greek-Chinese business conference , referring to a pledge by Greece’s creditors in November 2012 to launch talks on debt relief once Athens achieves a budget surplus before debt repayments.
“At the next Eurogroup on May 5, the Greek government will raise the issue,” Stournaras said. He added that Greece had achieved more than 75 percent of the fiscal adjustment it needs to make its debt sustainable, although most analysts say that can’t be done without some debt forgiveness or restructuring.
“We estimate that more than 85 percent of the improvement in the general government primary balance, aimed at reducing our debt to sustainable levels by 2020, has already been achieved,” he said, noting, “we have almost reached the top of the mountain.” Troika estimates dispute that, however.
Samaras is expected to strike a similar note in speeches over the coming days to step up his campaign against SYRIZA. His coalition partner, the PASOK socialists, have nearly disappeared in the polls and have aligned themselves with the new Elia (Olive Tree) political alliance in a desperate bid to stay politically alive.
This week, the premier is due to speak at forums on energy and tourism, both sectors with significant untapped potential.
He also is expected to adopt a two-pronged approach in campaigning – emphasizing the country’s growth potential in a bid to raise hopes about job creation and trying to change the Constitution to show voters politics and government isn’t corrupt and inefficient as many believe.
The proposed constitutional changes would review parliamentary immunity for MPs, set term limits for a prime minister, and open the books on party finances that are now closed.
Parties take money from the treasury, and also loans from banks. New Democracy and PASOK owe 250 million euros, which they aren’t repaying, while an investigation is underway into 100 million euros from PASOK that has vanished and which suspected to have be enembezzled.
Another key reform that the premier might put on the table, Kathimerini said, is the reduction of the number of MPs that sit in Parliament from 300 to 250 or 200. Greece has one of the world’s biggest parliaments, per capita.