* IMF, EU inspectors expected on Tuesday
* Greece appealing for more time on cuts, EU wants to stick
to targets
* Spiegel reports IMF threat to abstain from any new funding
ATHENS, July 22 (Reuters) – Greece is in a “Great
Depression” similar to the American one in the 1930s, the
country’s Prime Minister Antonis Samaras told former U.S.
President Bill Clinton on Sunday.
Samaras was speaking two days before a team of Greece’s
international lenders arrive in Athens to push for further cuts
needed for the debt-laden country to qualify for further rescue
payments and avoid a chaotic default.
Athens wants to soften the terms of a 130-billion euro
bailout agreed last March with the European Union and the
International Monetary Fund, to soften their impact on an
economy going through its worst post-war recession.
By the end of this year Greek GDP is expected to have shrunk
by about a fifth in five consecutive years of recession since
2008, hammered by tax hikes, spending cuts and wage reductions
required by two EU/IMF bailouts. Unemployment climbed to a
record 22.6 percent in the first quarter.
“You had the Great Depression in the United States,” Samaras
told Clinton, who was visiting Greece as part of a delegation of
Greek-American businessmen. “This is exactly what we’re going
through in Greece – it’s our version of the Great Depression.”
Athens must reduce its budget deficit below 3 percent of GDP
by the end of 2014, from 9.3 percent of GDP in 2011 – requiring
almost another 12 billion euros in cuts and higher taxes on top
of the 17 billion successive governments have cut from the
budget shortfall.
Greece wants its lenders to give it two more years to
achieve the budget goal to avoid an even deeper economic slump
but its lenders have opposed the idea because it would imply
even more financial aid.
Highlighting growing frustration with Athens, German
magazine “Der Spiegel” reported on Sunday, citing high-ranking
representatives in Brussels, that the IMF may not take part in
any additional financing for Greece.
The German and Greek finance ministries declined to comment
on the report, which suggested additional support required for
Athens could range from 10-50 billion euros.
NO MORE
Officials have already indicated there would be a shortfall
on the current bailout. How much is likely to depend on the
extent by much Greece continues to miss its fiscal targets and
the extent of support needed to keep its major banks afloat.
German economy minister Philipp Roesler told ARD public
television he did not expect Greece could fulfill its
requirements and that that would mean no more money to Athens.
“I am more than sceptical,” Roesler, who is the head of the
junior party in Germany’s ruling coalition and often outspoken
on euro zone issues, said in an interview.
“If Greece does not fulfill its requirements, there cannot
be any more payments to Greece,” added Roesler, whose views
often do not reflect those of Chancellor Angela Merkel or
Finance Minister Wolfgang Schaeuble.
The inspection team of the international “troika” of the EU
Commission, the IMF and the ECB will focus on the 11.7 billion
euros of spending cuts Athens needs to take in 2013 and 2014.
Clinton criticized Greece’s lenders for focusing excessively
on austerity, saying Athens will be more likely to repay its
debt if its manages economic recovery first.
“(It) is self-defeating… if every day people are saying
this may or may not work to give us back 100 cents on the
dollar, so give us more austerity today,” he told Samaras.
“People need something to look forward to when they get up
in the morning – young Greeks need something to believe in so
they can stake their future out here,” Clinton said.
