Greece to press on with cuts despite opposition

Greece will stand by extra reform efforts thrashed out with international creditors, the finance minister said on Thursday, despite resistance to more austerity from within the ruling coalition. Finance Minister Yannis Stournaras said the government was "pressing on" and that the new measures would be introduced in parliament next week. The deal is required for Greece to meet demands by its EU-IMF creditors and unlock a 31.2 billion euro ($40.5 billion) installment of rescue loans. "We do not have any more room (for delay)," said Stournaras, who briefly visited hospital earlier in the day and was diagnosed as suffering from fatigue and a viral infection. He said Prime Minister Antonis Samaras "is certain that all (coalition) lawmakers will give their consent, especially lawmakers of the calibre of Fotis Kouvelis," referring to a junior coalition leader who opposes deeper labour reform. The government has been trying for months to finalise a 13.5-billion-euro austerity package, holding talks with both a mission from the EU, IMF and ECB and internally with coalition partners. Although the bulk of the package has been agreed, there is opposition within the three-party coalition to additional labour reforms demanded by the so-called troika. Kouvelis' moderate Democratic Left party, continues to oppose cuts to severance pay and measures that would facilitate job layoffs. A number of lawmakers from the third and much larger coalition partner, the Pasok socialists, are also believed to oppose these measures. "This is the only obstacle to an agreement," Stournaras said. Labour Minister Ioannis Vroutsis defended the new package, telling lawmakers on Thursday that the talks with the troika had been "tough and exhausting." "We made a major effort to reach compromise solutions," Vroutsis said, with further cuts to the minimum wage averted. Stournaras was to meet with Pasok leaders to persuade them to back the measures. Stournaras told parliament on Wednesday that the troika had granted a long-sought two year extension for Greece to meet its fiscal goals. But officials at both the European Union and the International Monetary Fund were quick to make it clear that the troika had not yet reached any final deal with Athens. "Substantial progress has been made in talks with Greece but a few outstanding issues remain before a staff-level agreement can be reached," a spokesman for European economic affairs commissioner Olli Rehn said. The International Monetary Fund issued a similar message. The expected two-year delay would require an additional 15 to 18 billion euros, according to Greek media. A Greek finance ministry source on Thursday said the extension has been "effectively" accepted by the troika as the "working scenario". That means the fiscal adjustment sought by creditors would be spread out over four years instead of two, which the Greek government has argued will help the country's economy stabilise and return to growth faster.