ATHENS (Reuters) - Greece held a new round of talks with foreign lenders to bridge differences over 2 billion euros of disputed austerity cuts on Tuesday, with time running short to clinch a deal before a key meeting of euro zone ministers next week.
Athens has been haggling for weeks over 12 billion euros of cutbacks that its European Union and International Monetary Fund lenders have refused to sign off on over fears that some of the proposed savings are unlikely to materialize.
For the second day in a row, inspectors from the so-called troika of European Commission, European Central Bank and IMF lenders had to face rows of angry Greeks heckling them as they entered a ministry building to start discussions.
At the labor ministry on Tuesday, dozens of disabled
Greeks and their careers blocked the main entrance and chanted "We won't
let it pass!" in protest at the cuts. One held a banner saying: "They
handed 200 billion to bankers but cut down on medicine, treatment and
benefits for the disabled."The protests came a day after Greece unveiled an austerity budget that predicted a sixth year of recession in 2013 but failed to convince the troika, which has been skeptical of Athens' plans to cut health and defense spending.
"The troika is
questioning the effectiveness of the measures related to structural
reforms," a government official said, citing planned savings from
restructuring entities in health and other ministries.
The official
expressed optimism that a deal with the troika would be struck by the
end of the week, but a second government source cast doubt on that,
saying such an outcome now appeared "difficult".
NO UNIFIED STANCE
Both sources said
talks over the cuts were being further complicated by an internal rift
between the EU and the IMF over how to solve the Greek crisis, as
reported by Reuters last week.
The IMF wants
Greece to cut its debt further to make up for going hugely off-track
from the terms of its bailout, while Europe is resisting the option of a
new debt restructuring and instead prefers to give Athens more time to
get back on track, officials have told Reuters.
"If the troika doesn't have a unified stance, the negotiations become more difficult," the first official said.
Failure to get a
deal by Monday will be another setback for Greece's efforts to quickly
unlock its next installment of aid, without which the debt-laden country
faces bankruptcy and the prospect of an exit from the euro zone.
Athens needs the
troika's blessing on the austerity package as well as a positive review
by inspectors on the country's progress in meeting the terms of its
bailout to secure that aid.
But with European
leaders scrambling to shore up bigger economies like Spain and Italy,
analysts say Greece will eventually be handed enough aid to keep afloat
to avoid throwing the bloc into further turmoil.
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