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Athens rejected the proposals of the creditors

13 September 2012 / 12:09:10  GRReporter
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Athens rejected the proposals of international creditors for the recovery of its public finances by a brave reduction of the large public sector and radical liberalization of the labour market, Sky TV reported citing unnamed sources. Prime Minister Antonis Samaras did not like the ideas of the representatives of the European Commission, the European Central Bank and the International Monetary Fund at the outset, and his coalition partners Evangelos Venizelos from PASOK and Fotis Kouvelis from Democratic Left directly threatened to impose a veto.
    Greece must submit a plan for financial savings to the amount of 11.5 billion euro, which it must implement over the next two years. The government's proposals contain measures that creditors consider desirable and unfeasible, like limiting tax fraud, for example. Instead, they insist on tangible actions such as the reduction of the 720,000 public workers by 240,000 people and the extension of retirement age from 65 to 67 years. These particular proposals, however, are unacceptable to the Greek government.
    Athens must receive the new tranche of 31 billion euro from the creditors as soon as possible in order to prevent the economy from collapsing. It should have been paid in September but was postponed to October, and the latest information is that it will not come until November. According to Minister of Finance Yiannis Stournaras, the meetings of Eurogroup on 8 October and the European Council on 18 October will be crucial for the future of the Greek economy. Financial experts from the government team told GRReporter, that Athens considered the rescheduling of the second programme of financial consolidation by two years almost certain and was preparing to negotiate with its creditors the reduction of the interest rates from an average of about 4% to 3.5% on the average. The same sources claim that in the longer term, the country will offer a kind of OSI - Official Sector Involvement - i.e. writing-off part of the debt to the creditor countries.
    For now, Greece has to offer a reasonable plan to cut spending to 11.5 billion euro. The meetings of creditors continue today in the ministries of health, defence and public administration, where they are reacting to the cuts proposed by the respective ministers with a sceptical smile because most of them are just desirable in nature rather than real actions.
    Today, French Finance Minister Pierre Moscovici will arrive in Athens to meet both his Greek counterpart and Prime Minister Antonis Samaras. This is the first visit by a French finance minister in Greece since 1998.


Tags: Economic crisisInternational creditorsYiannis StournarasAntonis SamarasPierre Moscovici
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