Greece conceded on Thursday it had slipped "in some respects" in implementing the cuts and reforms demanded by lenders in exchange for saving Athens from bankruptcy, and tried to persuade them to cut the country some slack.
Finance Minister Yannis Stournaras made the admission after meeting senior officials from Greece's "troika" of lenders from the EU, European Central Bank and International Monetary Fund, whose inspectors have begun picking through the country's books after weeks of political paralysis.
Trying to take advantage of a shift in Europe towards more growth-friendly policy measures, the government is pressing to soften the punishing terms of a bailout that is keeping Greece solvent but also driving it deeper into recession. Conservative Prime Minister Antonis Samaras's uneasy coalition of left and right is under intense public pressure to ease the burden on a society that is fraying at the edges. But it faces fierce resistance from sceptical European partners led by paymaster Germany.
Stournaras, a liberal economist who was sworn in shortly before meeting the troika, said Greece's fiscal adjustment programme had been slowed by an election in May and a ballot re-run on June 17. "The economy has gone through two difficult elections and the programme is off track in some respects, and it is on track in others," he told reporters.
"The troika people told me jokingly that I'm not going to have a good time at the Eurogroup on Monday," he said, referring to his first meeting next week with fellow finance ministers of the 17-nation euro zone. The mission from the troika is reviewing Greece's faltering progress on fiscal adjustment and reform under a 130 billion euro ($162.6 billion) bailout deal.
With the economy in its fifth year of recession and almost one in four Greek workers jobless, the government says the austerity has become intolerable. But without the next 31.5 billion euro instalment of bailout funds, Greece risks running out of cash within weeks.
Challenged by an emboldened opposition committed to rejecting the bailout, Samaras has called for targeted tax cuts, a freeze on public sector layoffs, extra help for the poor and unemployed and an additional two years to cut the deficit. Greece's European partners say the bailout programme could be adjusted to make up for time lost to two elections and a deeper than expected recession. But they will not change its main tenets or targets.
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