ATHENS: Greece has scraped together a plan to save nearly 12 billion euros over the next two years in an increasingly desperate effort to convince visiting EU and IMF inspectors it deserves to be saved rather than pushed out of the euro zone. After days of wrangling, the new conservative-led government hammered out the austerity cuts hours before top officials from its foreign lenders began a series of meetings on Thursday to assess Greece's compliance with the terms of its latest bailout.
"The government has finalised the plan and will present it later today to political leaders," a senior finance ministry official told Reuters. The 11.7 billion euros in savings for 2013 and 2014 will be submitted for approval to the troika of EU, IMF and ECB lenders after the three parties in Prime Minister Antonis Samaras's government sign off on it on Thursday, a Greek official said.
"There's goodwill and we're on a good course," the official said after the finance minister met visiting troika officials. Near-bankrupt Greece is waging an uphill battle to convince sceptical lenders it merits further aid despite a history of failed pledges to reform and hit targets under two bailouts from the European Union and International Monetary Fund. A conservative victory in last month's election averted the imminent risk of a Greek euro zone exit, but speculation of that has intensified once again amid the realisation that the country is way off track in meeting the terms of its latest bailout. The chances of Greece leaving the euro in the next 12-18 months have risen to about 90 percent and Athens is most likely to quit the single currency within the next two to three quarters, US bank Citi said in a report.
In more bad news for Greece, ECB data released on Thursday showed deposits at Greek banks hit their lowest level in six years in June as savers worried about the country exiting the euro zone pulled their money out. Euro zone partners are keen to avoid a Greek exit that drags down bigger crisis-hit nations like Spain and Italy, but also face the growing reality of a third bill and debt restructuring to save Greece that they cannot afford.