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Pushed by Troika, Stournaras Threatened to Quit

September 25, 2012 Greek Reporter
Frustrated by relentless demands from international lenders that Greece make even deeper pay cuts, tax hikes and slashed pensions, Finance Minister Yiannis Stournaras threatened to resign during an intense meeting, the New York Times reported.

Prime Minister Antonis Samaras, under pressure to make another $14.6 billion in cuts, has put Stournaras, a highly-regarded thank tank economist lured into government services, as the point man in negotiations with the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB.)

The Troika is holding back a $38.8 billion installment, the last in a first series of $152 billion in rescue loans, and keeping a second bailout of $172 billion in limbo until Samaras, the New Democracy Conservative leader, can persuade his reluctant coalition partners, the PASOK Socialists and Democratic Left, to go along with the harsh conditions they all opposed before the June 17 elections.

All but $2.6-$3.9 billion has been finalized, but PASOK leader Evangelos Venizelos and Democratic Left chief Fotis Kouvelis are still opposing some of the cuts, as well as the proposed layoff and firing of as much as 35,000 public workers.

Wary of another round of broken promises from a Greek leader, the Troika has kept Samaras’ feet in the fire and that tension blew up at a meeting when Stournaras and the IMF’s lead negotiator got into a screaming match. The Times reported that Stournaras lost his temper when Thomsen demanded more cuts, and pointed to a hole in one of the windows of the Finance Ministry.

“You see this — this came from a bullet,” Stournaras said. “Do you want to overthrow the government?” referring to past social unrest and a massive general strike set for Sept. 26 with anger rising among the population over more austerity measures aimed at workers, pensioners and the poor.

Stournaras then threatened to resign rather than approve cuts to public employee pensions and salaries beyond the 5 billion euros ($6.5 billion) to which the government had agreed. When the incident was reported to Samaras a few minutes later, The Times said he called Thomsen to say that negotiations could not be conducted this way. Soon after, Thomsen left the meeting to let tensions cool and soon after the Troika left town with plans to return at the end of this week to resume talks.