* Greece will have no problem in talks with lenders -Samaras
* New, reduced government "will be more coherent"
* Reshuffle and updated coalition agreement promised soon
By Angeliki Koutantou and Harry Papachristou
ATHENS, June 22 Greece's recent government
crisis and failure to meet privatisation targets will not derail
an international bailout, Prime Minister Antonis Samaras said on
Samaras's government saw its parliamentary majority sharply
reduced on Friday after the small Democratic Left party left the
ruling coalition to protest against an abrupt shutdown of the
state broadcaster ERT.
Samaras told the newspaper To Vima that his new, two-party
government with the Socialist PASOK party would be more
coherent, adding that he expected no problems in talks with
lenders who are inspecting Greece's austerity and economic
"The government went through a rough patch over the last few
days but it stood on its feet and continues with renewed
determination and much better cooperation," To Vima quoted him
Samaras's conservative New Democracy party and PASOK
together control only 153 of the 300 seats in parliament. A few
independents may also back the government, and the Democratic
Left has signalled it could support some reforms on a
case-by-case basis to keep Greece in the euro.
Samaras and PASOK leader Evangelos Venizelos are expected to
meet as soon as Sunday to update their coalition agreement and
arrange a cabinet reshuffle. According to Greek media reports,
Yannis Stournaras is expected to remain finance minister.
The new government will have to conclude talks with the
so-called "troika" of international lenders - the European
Union, the International Monetary Fund and the European Central
Bank - who return to Athens later this month for a regular
review of Greece's compliance with the terms of their bailout.
Athens will have to acknowledge that it is likely to miss
its privatisation targets after its failure to sell off the
natural gas company DEPA blew a 1 billion euro hole in the
bailout plan, raising the prospect of fresh austerity measures
to make up the shortfall. [ID: nL5N0EM1U5]
"I don't think there will be any problems (in the troika
talks)," Samaras said in the interview, pointing to mid-year
deficit figures that are below interim targets.
"We are beating the (bailout plan's) overall targets ...
everybody agrees that in terms of fiscal adjustment we are ahead
of targets. There are some partial problems with partial targets
but these are addressed and will be dealt with," Samaras said.
Greece needs to plug a funding gap and clinch a positive
review to allow the IMF to keep bankrolling the 240-billion-euro
In their updated coalition agreement, PASOK and Samaras's
conservative New Democracy party are expected to reiterate their
pledge to meet Greece's fiscal goals, while rejecting new
austerity measures and agreeing to pushing the lenders gradually
to allow tax cuts to help soften a deep, six-year-old recession.