By Andy Dabilis
Trying to walk a political tightrope, Prime Minister Antonis Samaras told Greece’s parliament he will adhere to harsh austerity measures demanded by international lenders, in the hope that will lead to renegotiations that he promised voters to ease a crushing burden keeping Greece mired in a deep recession.
Samaras, in his first major speech since his New Democracy conservatives won the June 17th elections and created a fragile coalition government, said Greece would not immediately seek changes to the terms of a second bailout, for 130 billion euros.
Greece is surviving on a first rescue package of 109 billion euros from the EU-IMF-ECB Troika which insisted on pay cuts, tax hikes and slashed pensions. Samaras opposed that but supported the second package. The Troika said the new government must make further reforms and cut another 12 billion euros in spending or the money pipeline could be shut off.
Samaras said Greece would speed the pace of long-delayed privatisation of state entities, sell or lease state properties and abolish some state organisations, but said he still hoped to convince the Troika not to force him to fire 150,000 state workers over the next three years. He has put off asking for two more years to impose further tough reforms.
He said that the austerity measures he supported have not worked, creating 22.6% unemployment, shrinking the economy by 6.7% and leading to the closing of 1,000 businesses a week. “We do not want to change the targets,” set by the Troika to reduce the country’s staggering 330 billion euros deficit. “We have to change everything that is standing in the way of us achieving these targets.”
He said he would propose other cost-cutting steps that he didn’t identify instead of making more across-the-board cuts in spending, and that he would resist measures that would lead to more job losses. He did not highlight corruption, tax evasion or other campaign pledges to restore slashed pensions or repeal cuts in the minimum wage. He said Greece must promote structural reforms “aggressively” rather than ask for changes to the bailout.
Haralambos Tsardanidis, director of the Institute of International Economic Relations in Athens, told SETimes that Samaras is in a tough spot.
“It will be very difficult to renegotiate unless his government is able to implement the (Troika) programme. He pointed out with emphasis he is going to privatise companies but I’m not sure this is achievable in a recession. We haven’t had even one major privatisation.”
Antonis Klapsis, head of research for the New Democracy think tank the Konstantinos Karamanlis Institute for Democracy, said Samaras was out of options. “The government made it clear that we have to follow the basic guidelines of the agreement and then have the chance to renegotiate,” he told SETimes. “Otherwise it looks like Greece is trying to get rid of the agreement only. We would be saying we want all the gains without any of the difficulties.”
The new finance minister, technocrat economist Yiannis Stournaras, will be the country’s point man at a meeting of EU officials in Brussels on July 9th, where he will present Greece’s case, as he and Samaras did to Troika inspectors who visited Athens the previous week.
Kostas Ifantis, an associate professor of international relations at the University of Athens, said he believes Samaras’ tempered approach could work, unless Greeks again resort to the protests, strikes and riots against austerity that brought down the government of former PASOK leader George Papandreou last year.
“It was a good balance that demonstrated a realisation of the situation,” Ifantis told SETimes. “It constituted good will to push the reform agenda. There will be some sort of renegotiations and now Greece will have something to show.”