ATHENS – Greece’s coalition is setting itself for hard bargaining with international lenders who are due to return, with a showdown likely over many unfinished reforms and other issues, including tax cuts.
Prime Minister Antonis Samaras is eager to relief the pressure on austerity-crushed families and Greeks who’ve had to endure pay cuts, tax hikes, slashed pensions, worker firings and a steady decline the past few years in their quality of life.
He wants to provide breaks in the draft 2015 budget next month, including the lowering of the consumption tax on heating fuel, gradually cutting the solidarity tax on incomes and restoring the wages of members of the armed forces and emergency services, which had been court-ordered.
However, the coalition is concerned that it will have to give ground on structural reforms, which Samaras’ New Democracy Conservatives and its partner, the PASOK Socialists, doesn’t want to do after promising no more austerity or going after pensioners again.
“We have made it clear that in terms of labor issues, the changes have been completed,” said PASOK’s Giorgos Koutroumanis. “There are limits that we cannot exceed.”
The last of 240 billion euros ($317 billion) in two bailouts from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) are due this year, apart from some IMF monies which will go on until 2016. Samaras also said he wants an early exit from the memorandum with the lenders.
The IMF though said on Sept. 25th that it had not received any official notification of Greece’s plans to exit its adjustment program at the end of this year. “To the best of my knowledge, there’s been no such request at this point,” said IMF spokesman Gerry Rice.
“It’s up to the authorities of a member country… to request financial assistance from the IMF. Similarly, it’s up to the authorities to request the termination of the program should they consider that financial and technical advice from the Fund are no longer required.”
Samaras revealed the plan for an early exit during a visit to Berlin to meet German Chancellor Angela Merkel on Sept. 23d and his office on Sept. 25 denied that Greece’s Ambassador to Germany, Panayiotis Zografos, resigned the day after the talks due to a major difference of opinion with the Premier.
Reports suggested that Zografos had advised Samaras’s team to postpone the trip to Berlin as he felt it would be better to wait for a new European Commission to begin work.
The government’s decision to ignore his advice and a subsequent falling out with some of Samaras’s advisers was said to have led to the ambassador stepping down.
A Foreign Ministry spokesman denied that Zografos had made any recommendation for the trip to be put off.
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