Greece works on EUR 11.5bn in cuts: ministry source
(ATHENS) - Senior Greek ministry officials were meeting on Friday to detail 11.5 billion euros ($14.1 billion) in budget cuts promised to EU-IMF creditors, a finance ministry source said.
"The financial directors are meeting to clarify the programme that will be presented on July 24 to the troika," the official told AFP, referring to the mission of auditors from the EU, the IMF and the European Central Bank.
The auditors this week carried out a preliminary inspection on the state of Greek reforms, many of which were halted as the country held back-to-back elections on May 6 and June 17 in efforts to produce a workable government.
Their final report to Brussels, Washington and Frankfurt will determine whether Greece will receive 31.5 billion euros in loans by September, part of an overall rescue package of 240 billion euros running since 2010.
The 11.5 billion euros in savings, applicable in 2013-14, were originally to have been approved by parliament last month but the double ballot delayed their passage. Plans to axe 15,000 civil service posts this year have also stalled.
At the same time, Athens is trying to economise 3.0 billion euros this year to meet a targeted public deficit reduction to 7.0 percent of output.
The new conservative-led coalition government that emerged in June has pledged to renegotiate parts of the EU-IMF bailout, such as wage cuts and public sector job cuts, which it says have fuelled a recession now in its fifth year.
"We are talking about a two-year delay in the application of the programme" to 2016, the finance ministry source said.
But Greece's creditors have told the government to focus instead on getting its reforms back on track, including a major privatisation drive meant to raise 19 billion euros by 2015 which is badly behind schedule.
An EU official said last week that Greece will not receive its next instalment of bailout aid unless it continues to enact the required economic reforms.
"There will be no disbursement until the Eurogroup (of eurozone finance ministers) has determined that the programme is back on track," said the official, who spoke on condition of anonymity.
European Regional Policy Commissioner Johannes Hahn, on a two-day visit to Athens, said no such discussion can be held before the troika submits its report.
"In times like this I really rely on facts, on concrete proposals," Hahn told a news conference.
"We have always shown not only flexibility but readiness to discuss, but there is no doubt that on the the final targets and agreements we cannot change anything," he said.
The Austrian, who has visited Greece repeatedly to help unblock EU-funded infrastructure projects, said the new government faced a "hot summer" to make up for lost time after the elections.
"There is a hot summer, not only for climate but also in terms of workload," the commissioner said.
"From my perspective, the biggest obstacle is this confusion of responsibilities, which by the way is one of the reasons why foreign investors hesitate. I think this would be tackled by the new government immediately," he said.
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