ATHENS Oct 3 Greece's hopes of striking a deal
with its lenders before euro zone finance ministers meet next
week dimmed on Wednesday, when officials admitted the two sides
disagree on how much the economy will contract in 2013 - a key
figure in their calculations.
After weeks of talks, Athens is still struggling to clinch
an agreement on nearly 12 billion euros of cuts with the
"troika" of European Central Bank, European Commission and
International Monetary lenders, who fear some of the proposed
savings are not feasible.
"There is still a large gap. We are trying to reach a
compromise to seal a deal," Finance Minister Yannis Stournaras
told reporters after meeting the troika heads.
A senior government official said that there was still
ground to cover on about 2.5 billion euros worth of measures to
be applied next year.
The official added that there was also disagreement on how
much the economy would shrink next year, which has implications
for all of the other targets.
"There is disagreement on the macroeconomic scenario. We
project a recession near 4 percent, they're (troika) at 5
percent," said the official, who declined to be named.
Officials said not all hope was lost that the Greek
government would resolve issues before next Monday's meeting of
ministers, easing Athens's efforts to secure an already delayed
31.5 billion euro tranche of aid needed to avoid bankruptcy.
But it was increasingly likely the troika chiefs would
return next week to continue their inspection.
The latest austerity package, slated for 2013 and 2014,
includes a new round of wage and pension cuts - fiercely opposed
by the austerity-weary public - and drastic slashing of
pharmaceuticals spending, welfare benefits and plans to fire
'NO BRAWLING, BUT NO DANCING EITHER'
Prime Minister Antonis Samaras has managed to maintain the
reluctant support of his Socialist and leftist allies for the
unpopular cuts, but has yet to convince the troika to sign off
on the package, essential to paving the way for more aid.
Those talks, complicated by an internal rift between the EU
and IMF on how to resolve Greece's seemingly endless debt
problems, have become bogged down in a dispute over 2 billion
euros of proposed savings from health and defense cuts, which
the troika has pinpointed as unlikely to be feasible.
"We are trying to convince them on the cuts from structural
reforms. We are providing further facts and details," a second
government official said.
Government officials made no mention of the disputed cuts
after troika officials held the latest round of talks with the
development minister on Wednesday.
"We didn't have a brawl, but we weren't dancing either. We
exchanged ideas," said an official present at the talks.
The official said the troika also focused on issues such as
boosting competitiveness, removing market barriers and cracking
down on small cartels.
The troika has long demanded Greece make structural changes
to reform its economy and break the influence of powerful
lobbies, only to see Athens repeatedly fail to keep its pledges.
Greece is set to enter its sixth year of recession in 2013,
with unemployment at record highs and public patience with
austerity cuts at a low ebb.