Greek prime minister says country's till will empty by end of November

Friday 05 October 2012 18.51
Antonis Samaras confident that Greece will get next tranche of loans
Antonis Samaras confident that Greece will get next tranche of loans

Greece will run out of money at the end of November if it does not receive the next planned installment of its bailout loans, its prime minister said today.

Prime Minister Antonis Samaras said he is confident that the money will arrive on time.

But in an interview with the German daily Handelsblatt, he warned that it is "very difficult" to make further cuts to pensions and wages that the country's debt inspectors are seeking.

Greece has relied on bailouts from increasingly impatient international creditors since May 2010.

In return, it imposed a punishing austerity programme, repeatedly slashing incomes, hiking taxes and raising retirement ages.

Officials from the European Commission, International Monetary Fund and European Central Bank - the ''troika" - are currently in Greece assessing the country's progress in fulfilling the terms for receiving the aid.

If their report does not clear the way for the payment of the next €31 billion tranche of the country's bailout, Greece could be forced to default on its debts and perhaps leave the euro. It is unclear when a decision will come.

Asked how long Greece can hold out without that payment, Samaras was quoted as saying: "Until the end of November. Then the till will be empty."

Samaras said Greece is pressing ahead with budget consolidation, working on speeding up privatisation and trying to attract foreign investors. But he conceded that there are difficulties in negotiations with the troika.

"The troika is demanding above all further cuts to pensions and wages. That is very difficult, because we are already bleeding," he said.

"The existing cuts already go to the bone. We are at the limit of what we can expect of our population," he added.

Samaras leads a three-party coalition government that was put together after two elections earlier this year. "People know that this government means Greece's last chance," the prime minister was quoted as saying. "We will make it. If we fail, chaos awaits us," he added.

Meanwhile, Germany's Chancellor Angela Merkel is to visit Greece next week as Athens works to convince its creditors to pay the next installment of its bailout package.

Merkel's spokesman, Steffen Seibert, said the chancellor will meet Prime Minister Antonis Samaras in Athens on Tuesday.

Seibert said the visit follows an invitation that Samaras made when he visited Berlin in August.

Trade in top Greek banks halted after merger talk

Greek stock market authorities have temporarily suspended trading in the country's two biggest banks following press reports that they are in merger talks.

The banks contributed to strong gains being posted by Greek stocks.

The bank sector was up nearly 10%, while the benchmark general share index rose 5% by late afternoon trading.

Greek banks are under pressure to merge after suffering severe damage from the three-year-old financial crisis and a massive writedown in the country's debt earlier this year.

Neither bank would comment on the reported talks.

An NBG official said a statement would be issued later today.