Greek leaders push back decision on austerity cuts

Greek coalition leaders agreed to meet next week to hammer out almost 12 bln euros worth of austerity cuts demanded by the near-bankrupt country's lenders after a deal proved elusive at an initial round of talks on Wednesday.
Greek officials have spent the past week scrambling to identify the savings for 2013 and 2014 before European and IMF officials visit next week and decide whether Athens merits another tranche of aid from its latest bailout package.
But final agreement on the cuts is expected only after much bargaining among the three party leaders in the conservative-led government, each of whom is keen to avoid appearing in favour of cuts that heap more misery on austerity-weary voters.
"We had a very good discussion," Finance Minister Yannis Stournaras told reporters after a three-hour meeting between Prime Minister Antonis Samaras and his two coalition allies.
"We agreed on the basic direction."
Samaras's allies – Socialist party leader Evangelos Venizelos and leftist party chief Fotis Kouvelis – emerged after the meeting to reiterate that there would be no new spending cuts this year beyond those already agreed.
Both leaders, who have championed reducing the painful austerity diet of wage and pension cuts, said little about their discussion on future spending cuts other than to say talks would resume in the coming days.
One senior party official said some ministries failed to submit their proposals for cuts ahead of Wednesday's meeting, delaying efforts to finalise them. Only about half of the promised 11.7 bln euros of spending cuts had been identified in the run-up to the meeting.
Clinching agreement on the unpopular cuts is likely to be Samaras's first major test since assuming power last month. His government has made a positive first impression on European partners abroad, but has angered critics at home who accuse it of not pushing aggressively enough for changes to the bailout.
The nascent government has said it will seek an additional two years to hit fiscal targets included in the bailout, but plans to push for that only after regaining lost credibility by getting its reform programme back on track.
Identifying and backing the spending cuts in the face of protests will be key to appeasing the so-called troika of EU, ECB and IMF lenders, who have repeatedly warned Athens will get no further cash unless it learns to live up to its pledges.
EU officials have indicated they will find the money to see Greece through a bond payment in August, but the country risks running out of money soon afterwards.
The cuts, equivalent to 5.5% of GDP, are aimed at narrowing Greece's budget deficit to below 3% of GDP by the end of 2014 from 9.3% in 2011.
They are expected to include reductions to welfare benefits, and lower spending on health and defence as well as savings from a crackdown on fraud and the slashing of expenses in the public sector.
Entirely dependent on foreign aid to keep the state running, Greece is struggling through its fifth year of recession. Nearly one in four Greeks are out of work, and thousands of businesses have put up their shutters due to the country's debt crisis.