ATHENS (Reuters) - Greek Prime Minister Antonis Samaras said on Tuesday he would push ahead with implementing deep spending cuts and lashed out at unamed foreign officials for sabotaging his country’s efforts to solve its problems.
Samaras addressed members of his party as inspectors from the troika, the trio of international lenders keeping Greece afloat, returned to Athens to relaunch its stalled economic plan.
The officials from the International Monetary Fund, European Commission and European Central Bank must decide whether to keep the nation hooked up to a 130-billion-euro lifeline or let it go bust.
In his speech, Samaras said some foreign officials were making irresponsible comments, predicting Greece won’t make it.
“I say it openly and publicly, they undermine our national effort. We do all we can to bring the country back on its feet and they do all they can so we can fail,” he said.
He did not say who exactly he was referring to but on Sunday German economy minister Philipp Roesler said he did not expect Greece could fulfill its requirements and that that would mean no more money for Athens.
Greece has fallen behind targets agreed as conditions of its bailout deal, mainly due to three months of political limbo as it struggled to form a government after two inconclusive elections but also because of resistance to reforms from unions and special interests.
While seeking to re-negotiate some of the bailout terms, Samaras said Greek lawmakers had to demonstrate progress on spending cuts.
“There are certainly delays in this year’s agreed programme and we must quickly catch up,” said Samaras. “Let’s not kid ourselves, there is still big waste in the public sector and it must stop.”
Greece blames a deeper than expected recession, seen at about 7 percent of GDP this year, for missing its tax revenue and budget deficit goals and wants two more years’ breathing space to avoid inflicting harsher fiscal measures on a public already enduring tax hikes, spending and wage cuts and record joblessness.
Samaras said the economy might shrink by more than 7 percent in 2012 and it would take Greece two years to return to growth. Unemployment was close to 24 percent, he said.
Troika officials say Athens is failing to implement measures that will boost growth, such as planned privatisations, a major tax reform and the opening of closed markets and professions.
“The programme has not produced the desired results because it was not implemented. We must first see the government fulfil its commitments and then decide if it works or if it needs to be adjusted,” a troika source told Reuters on condition of anonymity.
A troika team arrived in Athens late on Monday. The heads of the mission arrive later in the week and are scheduled to see Finance Minister Yannis Stournaras on Thursday.
Samaras will see the troika chiefs on Friday, after meeting the political leaders backing his government.
Samaras is under political pressure from the Socialist and leftist parties in the coalition to demand a renegotiation of the bailout terms which they say punish the poor.
“First we must show the country respects its targets,” he said. “We will then seek to extend the programme as soon as possible.”
Stournaras, an economist who chaired a respected think-tank before becoming minister, has said he will not ask for an extension or change of terms before proving the new government’s credibility - starting with 11.7 billion euros’ worth of cuts for 2013-14 that should have been drawn up in June.
The government has come up with only about 8 billion euros of cuts and is scrambling to close the gap, Greek officials said.
In official statements, both the EU and the IMF have said the programme was behind schedule and needed to be re-launched before Greece could get any more funds, with the next tranche not expected to be disbursed before September.
“An IMF mission will start discussions with the country’s authorities on July 24 on how to bring Greece’s economic program, which is supported by IMF financial assistance, back on track,” an IMF spokesman said on Monday.
In the meantime, the lenders may have to extend Greece a bridge loan to cover a 3.2 billion euro bond payment due in late August to stop it going bust and putting Italy and Spain in the markets’ firing line.
Analysts say softening the stance on Greece would create problems elsewhere. For example, if the troika agrees to give Greece two more years to cut its deficit to 3 percent of GDP it might have to lend it an extra 40 billion euros, depriving funds from larger troubled members such as Spain, said Ben May of Capital Economics.
“Policymakers face a tough task to reach an agreement on what Greece must do to receive future bail-out loans that is deemed acceptable to all parties. For now, then, we still think that Greece could exit the single currency by the end of the year,” he said in a report.
The troika will stay as long as needed, with some officials saying the visit would last at least a week and possibly longer. It may well ask for additional measures this year, which would almost certainly rock the ruling coalition and ignite protests from the radical leftist SYRIZA opposition party.
“The government has no business discussing with three clerks on how to implement a failed programme,” SYRIZA president Alexis Tsipras told his parliamentarians.
“New tough austerity measures are insane and will lead us to bankruptcy and away from the euro zone.”
Additonal reporting by Harry Papachristou; editing by Stephen Grey