Samaras confers with creditors as eu urges Greece to deliver

Greek Prime Minister Antonis Samaras met international creditors to hear demands to reinvigorate economic reforms in order to get more funding, as European Commission President Jose Barroso urged him to fulfill promises.

“The prime minister was briefed on the results of the troika’s talks in Athens and the initiatives that must be taken so that the Greek program can return to being on track,” government spokesman Simos Kedikoglou told reporters in the Greek capital after the meeting today.

Greek political leaders struggled to clinch agreement on an 11.5 billion-euro ($14 billion) package of budget cuts yesterday, as the “troika” of officials representing the euro area, the European Central Bank and the International Monetary Fund continued a review of Greece’s progress that may determine its future in the euro.

Samaras and his coalition partners, Evangelos Venizelos of Pasok and Fotis Kouvelis of Democratic Left, are to meet again on July 30 to determine the savings required to receive the funds pledged under Greece’s two rescue packages totaling 240 billion euros.

“The key word here is: deliver,” Barroso said yesterday after meeting the premier in the first visit to Greece by a senior European Union official in more than a year. “Deliver, deliver, deliver. The delays must end. Words are not enough.”

‘Extremely Difficult’

Greece, which held consecutive elections in May and June as public opposition to spending cuts grew, risks running out of money without the disbursement of 4.2 billion euros due last month as the first installment of a 31 billion-euro transfer. Citigroup Inc. said there’s now a 90 percent chance Greece will leave the euro in the next 12 months to 18 months.

“We are not done,” Kouvelis told reporters after the meeting yesterday. “The economic situation is extremely difficult but society on the other hand can’t stand being bled any more.”

Since forming his coalition government, Samaras has promised more asset sales to pay down debt and help finance an additional two years to the program agreed with creditors to restore economic health. He and his partners are trying to avoid the across-the-board pay and pension cuts that have driven the country into the worst recession since World War II.

Greece’s two elections in six weeks derailed planned reforms, halted state-asset sales and fanned concerns over whether the country can remain in the 17-nation euro bloc.

Failure to satisfy the troika on budget cuts and other reforms promised under the two packages may threaten Greece’s place in the euro.

‘Best Chance’

Barroso said he was encouraged by Samaras’s pledges to step up state-asset sales and to keep to promises made under a 130 billion-euro second rescue package earlier this year. Sticking to commitments would ensure the country’s place in the euro, he said.

“Staying in the euro is the best chance to avoid worse hardship and difficulties for the Greek people, mainly for those in vulnerable positions.” he said. “Greece is part of the European family and the euro area and we intend to keep it that way.”

Troika officials will also meet today with Venizelos, a former finance minister who negotiated the second bailout earlier this year.

Venizelos said yesterday the continuous speculation on a Greek exit from the euro is undermining the country’s attempts to reform its economy as well as hurting other nations.

“Sacrificing Greece will prove suicide for the euro area,” Venizelos said. He said it was imperative that the current bailout plan be extended to the end of 2016.

Greece has to reduce its budget deficit to 7.3 percent of output this year from 9.1 percent in 2011. With the economy shrinking about 7 percent, more than forecast, Finance Minister Yannis Stournaras has said the goal is to reach the nominal target of 14.8 billion euros for this year’s deficit, not the percentage goal.

--With assistance from Natalie Weeks, Eleni Chrepa, Jonathan Stearns and Tom Stoukas in Athens and Guy Johnson in London. Editors: Eddie Buckle, Craig Stirling

To contact the reporters on this story: Maria Petrakis in Athens at mpetrakisbloomberg.net; Marcus Bensasson in Athens at mbensassonbloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1bloomberg.net