Athens needs cash. And he needs it now. To avoid bankruptcy, and a potential exit from the eurozone, the Greek government must be able to obtain the 31,5 billion euro tranche, part of the 130 billion rescue program developed with the Troika (Monetary Fund, EU Commission and European Central Bank). The condition for the release of the loan is the approval by the "trio" of the austerity measures which the Greek Finance Minister, Yannis Stournaras, will publicly announce only once he gets the green light, presumably this evening.
Meanwhile, today it was announced that the Greece's GDP will shrink for the sixth consecutive year also in 2013 – up to 3,8% – and the deficit/GDP ratio will be reduced to 4,2% but with a primary surplus of 1,1%. For this year, however, the contraction of the gross domestic product is estimated at 6,5% with a deficit/GDP ratio of 6,6% and a primary deficit of 1,4%.
The prime minister Antonis Samaras he told the conservative newspaper To Vima yesterday that the Greek financial system is in dire need of a liquidity injection. “The Greek economy awaits this money like dry land awaits rain", he said. The Troika has given the Greek Executive an additional week to finalize the 13,5 billion euro austerity package for the next two years – initially the saving was supposed to be 11 billion but some Greek newspapers also speak of 14,5 billion in cuts. The measures "must be completed and voted on in a few days ... there can be no delays," said Samaras, who has just completed his first 100 days in government in the coalition with socialists and left-wing moderates. Athens has not received aid from international institutions since May: in recent months the bailout had been suspended following the political impasse that froze the reforms.
Minister Stournaras said on Friday that the coalition had reached agreement on the main points of the austerity package, which today should receive the green light from the Troika. According to journalistic rumors, it would predict seven billion cuts in pensions, social safety nets and salaries of the highest paid civil servants such as judges, professors and police officers. Another 3,5 billion will be saved from structural reforms e early retirements of 15 civil servants and 3 billion from new taxes. In Athens, at least 30 citizens have already taken to the streets to protest against the new austerity measures.
To mitigate the effects of these reforms, the less conservative wing of the coalition is pushing Samaras to ask the Troika for two more years to achieve the objectives set (from 2014 to 2016). The decision will be taken between Ecofin, the meeting of finance ministers of the Eurozone on 8 October and the EU summit on 18 and 19 October.
