ATHENS – The coalition government of Greece applied for a bridge loan to cover their financial needs until September. Meanwhile, they are also trying to recover $11.7 billion in spending and this has prompted them to think up of a rescue plan to appease international lenders and exasperated investors.
Policies must be submitted for approval to the auditors of the “troika” of the European Union (EU), the International Monetary Fund (IMF) and European Central Bank before July 25. Members of both organizations will then visit Athens to further assess the situation.
The visit, and subsequent negotiations that would last until September. These will determine the EU and the IMF’s decision on whether or not continue to fund Athens. Should they decide to turn down the application for funding aide, Greece’s economy will continue to crumble.
The troika and increased pressure on the beleaguered Athens, has prompted the Greek government to suspend the payment of the current bailout of €130 million and has urged them to seek bridge loan lenders to meet their financial needs until September.
“We are fighting to secure the bridge loan for September,” said an official from the Finance Ministry.
Cabinet members and senior Ministry officials held daily meetings to implement spending cuts. The Finance Minister Yannis Stournaras, presented a list of proposals to the leaders of the three parties forming the coalition governing the country last Wednesday.
“Since last Thursday, there has been a methodological effort of all ministers to find realistic proposals,” said Deputy Finance Minister Christos Staikouras Reuters. “We must be ready by July 23,” he added.
The cuts, equivalent to 5.5% of the GDP of the country, should take effect within the next two years for the budget deficit of Greece to be reduced to less than 3% by end of 2014. In 2011, the cuts were equivalent to 9.3%.
The Government is considering making cuts in various sectors. Some of which include reducing the quotas of high pensions, closing tax bumps, reducing operating expenses, cut costs in public hospitals and anti-fraud efforts. They are positive that these cuts will help limit Greece’s spending amount.
Athens promised to streamline the public administration in order to make it more efficient. The Government also considered proposals to extend the service of military men to reduce the need for professional soldiers. Additionally, they are also thinking of making the church pay half the salaries of the clergies, thousands of whom are under the government’s budget.