ATHENS, Greece – Greece’s conservative government rejected demands by rescue lenders for deeper austerity measures, the prime minister said late Tuesday, describing calls for further cuts as “catastrophic” for the country’s chances for recovery.
Antonis Samaras’ remarks signalled failure so far to reach agreement with bailout lenders before parliament begins debating the 2015 budget Wednesday that includes targets which other Eurozone countries have openly disputed.
“No one can accept this irrational and unjustifiable pressure,” Samaras told a financial conference in Athens.
“No one has the right to behave toward us as they did two and a half or four years ago when things were falling apart … To reduce pensions or increase the price of medicines, that would be catastrophic.”
The government is locked in negotiations with the “troika” of the European Central Bank, European Commission and International Monetary Fund over a new round of cuts demanded in exchange for final eurozone loan installments under the bailout program.
Samaras’ coalition government insists that its huge national debt is sustainable — despite reaching roughly 175 per cent of gross domestic product — and that it will repay 240 billion euros ($300 billion) in bailout loans.
But Greece is seeking to ease draconian international oversight of its finances with a transition to a so-called precautionary credit line next year.
The conservative are trailing the anti-bailout Syriza party in opinion polls before a parliamentary vote in February for the country’s new president. That vote that could produce a stalemate and force a snap general election.
Earlier Tuesday, Syriza leader Alexis Tsipras insisted he would demand a reduction in the country’s bailout debts if his party comes to power.
“We demand the immediate end of austerity, an agreement for a haircut of the debt, and a significant cut in the annual cost of servicing the debt,” Tsipras said.
He claimed the government had already caved in to demands by creditors to impose the harsh new measures — with a new round of pension cuts and sales tax hikes — in what he described as a “2.5 billion euro ($3.1 billion) U-turn.”
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