Newspaper article International Herald Tribune

Greece and Foreign Creditors Resume Negotiations ; Country's Leaders Dispute Need for Further Austerity to Secure New Rescue Loan

Newspaper article International Herald Tribune

Greece and Foreign Creditors Resume Negotiations ; Country's Leaders Dispute Need for Further Austerity to Secure New Rescue Loan

Article excerpt

The two sides are disputing the size of a budget gap for next year and whether new austerity measures will be needed to cover it.

Government officials resumed talks with representatives of Greece's foreign creditors on Tuesday amid a dispute between the two sides over the size of a budget gap for next year, and whether new austerity measures would be needed to cover it, as tolerance in the recession-hit country was wearing thin.

The return to Athens by inspectors from the European Commission, European Central Bank and International Monetary Fund, which have extended Greece two bailouts worth 240 billion euros, or $323 billion, over the past three years, comes amid rising political and social tensions because of the seemingly relentless austerity being imposed on Greeks in return for the aid.

Labor unions have called a general strike for Wednesday, the fifth this year, to protest the government's "catastrophic, dead- end policies." With unemployment pushing 28 percent and living standards slashed, the fragile coalition of Prime Minister Antonis Samaras appears increasingly divided over the punishing economic program being demanded by creditors.

A dispute over the fiscal gap for 2014 -- which Greece calculates at EUR 500 million and the three lenders put at more than EUR 2 billion -- almost derailed the resumption of negotiations. Troika officials only confirmed their visit at the last minute after a flurry of speculation about possible cancellation. A European Commission spokesman, Simon O'Connor, said the visit was finalized after Athens sent additional budget data to Brussels late on Friday.

Although eager to secure new rescue funding, government officials are insisting that Greeks have been pushed to their limits. Mr. Samaras labored the point in an interview broadcast late Monday night on Greek television. "Horizontal measures such as reductions to salaries and pensions can neither be endured by our society, nor are they necessitated by the current fiscal situation," he said, noting that "structural reforms" pledged by Athens would be enforced. …

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