Greek Budget Showdown Looms

Government tries to find common ground on austerity and gain support of international lenders.

Greek Prime Minister Antonis Samaras faces a week of wrangling as his coalition government tries to find common ground on two more years of austerity to persuade international lenders to keep the country in the euro.

Inspectors from the European Commission, European Central Bank and International Monetary Fund, known as the troika, are due back in Athens on Sept. 7 to complete a review begun in July. They are likely to find that the three coalition partners are still working on an 11.5 billion-euro ($14.5 billion) blueprint that may test the cohesion of Samaras’s government.

Bank Needs

Most of the instalment outstanding is destined for Greek banks, under a previously-agreed plan to recapitalise the institutions that suffered the most under the largest debt restructuring in history. Getting those funds is central to pumping liquidity back into a cash-starved economy in its fifth year of recession.

Delayed Pain

In a bid to stem possible defections from his party, Samaras said Aug. 30 that this “painful, necessary” package will show creditors the country is serious about meeting its commitments. He also vowed it would be “the last of its kind.”

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