Mr. Samaras‘ government — comprising his New Democracy conservatives; their long-time socialist rivals, PASOK; and the small Democratic Left party — has issued a policy statement outlining changes it would like to make to the terms of its international bailout. Those include repealing certain tax increases, freezing public-sector layoffs and extending by two years the mid-2014 deadline for tough austerity measures.
Whether Greece can amend the terms of its loan agreement will depend on how the proposals are viewed by its international creditors. Germany, the largest single contributor to eurozone bailouts, has repeatedly said Athens must stick to its austerity pledges.
“One thing is clear,” German Foreign Minister Guido Westerwelle said from Luxembourg. “We cannot allow everything to be negotiated again. We can also not allow discounts to be granted. What has been decided upon stands. That the (Greek) election campaigns have cost time is obvious. That’s the situation, and we have to deal with it. But the fact remains that the agreements must be implemented.”
Mr. Seibert also stressed that Greece must stick to its commitments.
“A program has been agreed upon, a program goes for every government, no matter if it’s a new government, and the program is the best way to see Greece return to economic health,” he said.
In Brussels, Mr. Tardio also stressed that “Greece has to face its financial obligations,” adding that before any further funds can be disbursed, “there has to be a thorough analysis.”
“It’s no secret that there have been delays in several areas of implementation,” he added.
The latest figures released by the Greek Finance Ministry on Monday showed that Greece‘s budget deficit for the first five months of the year was better than expected, standing at 10.87 billion euros ($13.63 billion) instead of the target of 12.89 billion euros ($16.17 billion) on a modified cash basis.
Revenue, however, was below target, with the state budget net revenue standing at 19.67 billion euros ($24.56 billion), 926 million euros ($1.15 billion) short of the targeted 20.6 billion euros ($25.73 billion), due in part to lower domestic consumer demand and lower tax revenues.
The ministry said, “This revenue shortfall was more than compensated for by the savings in State Budget expenditures for the first five months of 2012.”
David Rising in Berlin and Toby Sterling in Brussels contributed to this article.