Greek leader warns of deteriorating outlook

Published on 08/07/2012 00:00

GREEK socialist leader Evangelos Venizelos warned that Greece’s recession would be deeper than expected this year, and called for extending the deficit-cutting plan to three years, at a meeting with international inspectors yesterday.

The socialists are one of the three parties in Greece’s new coalition government keen to soften the punishing terms of an International Monetary Fund and European Union bailout that is keeping the debt-laden country afloat while driving it deeper into 
recession.

Athens, due to run out of cash in weeks without support from the troika of the EU, IMF and European Central Bank, has fallen behind agreed targets partly due to a two-month political hiatus to allow for a rerun of an election that failed to produce a government.

The troika’s inspectors are on a fact-finding mission in Athens, reviewing Greece’s faltering progress on fiscal adjustment and reforms under a ¤130 billion (£104bn) bailout deal. “Mr Venizelos insisted on the need to agree on a new, 
updated medium-term 
fiscal strategy programme,” a statement said yesterday.

“He raised the issue of revising the bailout in line with the procedures foreseen in it and extending the time period of the fiscal adjustment to three years,” the statement said.

The meeting with Venizelos lasted a little more than an hour. The inspectors have already met with prime minister Antonis Samaras and will meet finance minister Yannis Stournaras today.

With Greece’s economy set to contract by more than 5 per cent in 2012, its fifth straight year of recession, and with almost one in four Greek out of work, Athens says the austerity has become intolerable.

Samaras said his aim was not to demand a change of the goals set in the bailout deal, but in the austerity policies imposed to meet them.

An opinion poll yesterday showed Greeks are equally split on whether the country should stick to the agreed bailout terms or ditch them.