Greek coalition leaders to debate spending cuts

Greek Prime Minister Antonis Samaras was to confer with his coalition allies on Monday on spending cuts needed to unlock a 31.5-billion-euro loan instalment from the country’s EU-IMF rescue package.

Samaras was to see his two partners — socialist Evangelos Venizelos and moderate leftist Fotis Kouvelis — at 1500 GMT, the PM’s office said.Greece is under pressure to earmark 11.5 billion euros ($14.3 billion) under an EU-IMF deal finalised in February, a process delayed by double elections in May and June before a workable government could be formed.

“We must finally be credible, we must settle this obligation which is pending from the previous administration,” government spokesman Simos Kedikoglou told Antenna television on Monday.

The three leaders discussed the issue on Friday but without reaching a final agreement, with additional cuts expected to cause anger in a country mired in a deep recession after two years of austerity.

According to reports, the savings will largely come from a cap on maximum pensions and cuts to health allowances and benefits.

They are to be submitted to auditors from the EU, IMF and the European Central Bank whose report in September will determine Greece’s continued access to loans.

“We want to help and we will stay as long as it is needed until your programme is ready,” the International Monetary Fund’s mission chief Poul Thomsen said during a dinner with Finance Minister Yannis Stournaras, a finance ministry source said on Sunday.

Thomsen said the troika would help Greece finalise the new measures and would then draft a report that will pave the way for the next installment of its loan agreement.

As rumours of a Greek eurozone exit grew louder last week, Nobel prize-winning economist Robert Mundell told two Greek newspapers on Sunday that it was important for the country to remain in the eurozone.

In the aftermath of ECB chief Mario Draghi’s recent comments that the European Central Bank was ready to do “whatever it takes to preserve the euro,” Mundell claimed the ECB should issue its own bonds.

Mundell, who is often called the “father” of the euro, had warned last week that a euro exit would be disastrous for Greece and would take the country 20-50 years back.

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