Greek finance minister seeks more time to meet loan terms

(ATHENS) - Greek Finance Minister Yiannis Stournaras warned Saturday his country needed more time to meet commitments made to EU-IMF lenders if it wants to avoid deepening its recession.

"The extension of the budgetary adjustment is necessary because of the recession," Stournaras told lawmakers during a three-day parliamentary session that ends Sunday with a confidence vote for the coalition led by conservative Prime Minister Antonis Samaras.

"Budgetary sliding because of the recession should not be corrected by more (austerity) measures because a vicious circle would continue," Stournaras said.

However, he cautioned that Greece could not launch a renegotiation without first "taking the measures delineated in the adjustment plan."

"We must adopt the measures included in the second loan in February so that we do not threaten the release of this loan," he said.

Stournaras also urged reforms "to achieve a radical change to the state" and faster privatisations that were promised lenders but delayed by an extended election season.

Samaras' conservative New Democracy party leads a coalition of 179 seats with the socialist PASOK party and the much smaller Democratic Left in the 300-seat chamber.

Crisis-hit Athens is now drawing funds from a 130-billion-euro ($164 billion) lifeline but the government wants to renegotiate the agreement to avoid further job losses and put more emphasis on growth rather than austerity.

Since a June 16 election, some members of the coalition have made plain their desire to revisit terms of the second bailout agreed with lenders from the European Union, International Monetary Fund and European Central Bank.

But the task will not be easy as officials from the so-called troika of creditors have shown stiff resistance to any talk of renegotiation and refuse to give up money Athens urgently needs until progress is seen.

Greece is in its fifth year of recession.

Evangelos Venizelos, whose socialist PASOK party is part of the new coalition, earlier said Greece must seek new terms to its bailout and extend a deadline to balance its budget by three years.

"It is not possible to make such a huge budgetary adjustment in such a short period," Venizelos said.

"It is absolutely necessary to renegotiate the programme according to the very important decisions from the European summit of June 29," he said.

"We need to design a new programme in the medium-term... we need a extension of the budgetary adjustment of three years to 2017," he added.

Venizelos, who helped negotiate the second bailout as finance minister, met earlier with the EU-IMF auditors who are visiting to review government books and gauge Greece's progress towards meeting its rescue terms.

A party statement said Venizelos had asked for a "renegotiation" of loan terms based on "macroeconomic data and especially a 2012 recession that will be deeper than forecast."

The Greek parliament is in a three-day session that began Friday with a speech by Prime Mister Antonis Samaras outlining policy and ends late Sunday with a confidence vote that the three-party coalition should win easily.

Party group leaders took turns addressing lawmakers during the Saturday session, including Nikos Miholaliakos, head of the extreme right Golden Dawn party.

During his speech, more than a third of the parliament's 300 lawmakers left the chamber in protest.