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Greece seeks austerity plan extension

The Greek Prime Minister will suggest spending cuts be spread over four years instead of two in his talks with German and French leaders next week.

File photo of Greece's Prime Minister Antonis Samaras
File photo of Greece's Prime Minister Antonis Samaras
Image: Thanassis Stavrakis/AP/Press Association Images

GREEK PRIME MINISTER Antonis Samaras will call for an extension to Greece’s austerity programme when he meets with Angela Merkel and Francois Hollande next week, the Financial Times reported.

Samaras will hold talks with the German chancellor and French president in Berlin and will suggest that public spending cuts be spread over four years instead of two, according to a document seen by the paper.

Greece is currently scrambling to find budget cuts – amounting to around five percent of GDP – to be implemented in 2013 and 2014 as part of its existing bailout deal with the European Union and International Monetary Fund.

Greece raised 4.063 billion euros in a sale of three-month treasury bills yesterday, paying a modestly higher rate of 4.43 per cent, the public debt management agency said.

The extraordinarily large sale should help the Greek government avoid a cash crunch, according to a finance ministry source, as it faces redemption of a 3.2-billion-euro bond held by the ECB which expires on August 20 and awaits the next installment of its EU-IMF bailout package.

Greece has been shut out of the long-term debt markets since 2010 and has regularly issued short-term debt.

Relying for its economic survival on EU-IMF bailout loans, Greece is waiting for the next installment of nearly 31.5 billion euros as a political deadlock, the result of back-to-back elections, has thrown its reform programme off track.

Auditors from the country’s international creditors, who visited Greece in late July, are expected to return in September.

- © AFP, 2012

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