?The European Commission read the riot act to Greek Prime Minister Antonis Samaras Thursday, insisting that he push ahead immediately with reforms to meet structural changes demanded by the EU. Members of the EU Commission believe that Samaras is dragging his feet and refusing to take on the country’s powerful public workers block.
After the meeting, Samaras issued a public statement that Greece is determined to move ahead with fiscal changes and structural reforms to create jobs that will result in an economic recovery.
The reform effort in Greece has already taken two blows from elections in May and June that nearly sent the country over the edge. This has resulted in a political stalemate where the Greek government has refused to shut down unneeded state agencies, fire state workers, repair the tax code, recapitalize banks, sell off state assets and uncover 11.5 billion euros of cuts to spending.
Finance Minister Yannis Stournaras admitted that Greece has fallen behind in implementing austerity measures. The country is in the fifth year of a recession and has 22 percent unemployment.
Greece is asking for a two year extension to implement its budget-reducing targets. It also wants to roll back previous wage and pension cuts and increase taxes.
The major sticking point, though, is the EU’s demand to cut the public sector, including firing thousands of workers. The country’s three coalition partners that make up the government insist that cuts be made through attrition and not layoffs.
As far as offering Greece an extension, that idea would cost the International Monetary Fund and its EU partners another 20 billion euros. They are already on the hook to pay 173 billion euros for Greece’s bailout. Other European capitals are not keen on the idea.
