Greece says has been given more time on austerity
ATHENS (Reuters) - Greece's finance minister said on Wednesday that his country had been given more time by its international lenders to implement austerity cuts, an assertion played down by leading European Union officials.
European paymaster Germany said the EU would only decide on the matter after receiving a report on Greece's progress from the 'troika' of lenders - the European Commission, the European Central Bank (ECB) and the International Monetary Fund - while ECB President Mario Draghi said no final decision had been made.
But Greek Finance Minister Yannis Stournaras said the delay has already been agreed and that a new package of austerity measures would be voted on in parliament next week.
After months of wrangling on the 13.5-billion-euro (10.9 billion pounds) package of spending cuts and reforms, he said the near-bankrupt country had won additional concessions from its lenders and had largely wrapped up talks on the plan.
A deal on the package is crucial for Greece's efforts to unlock more aid under its latest bailout, with the country just three weeks away from running out of cash.
"Today, we obtained the extension," Yannis Stournaras told parliament, referring to being given an additional two years to hit bailout targets, something Athens has been lobbying for.
"All the scenarios that we are working on with the (international lenders) are based on the assumption of an extension," he said.
An earlier Reuters report cited a draft agreement between Greece and the troika that specified Athens will have until 2016 rather than until 2014 to hit its budget deficit targets.
Speaking in Berlin, Draghi said: "The review is not yet finished. I understand progress has been made, but some parts need to be defined."
Stournaras said he would tell euro zone colleagues meeting on Thursday that the package was ready to be put to the Greek parliament next week. In the meantime, Greece was still seeking further concessions from lenders on the 13.5-billion-euro plan.
"To a great extent, the negotiations have been completed," Stournaras said. "But even now, we are trying for improvements."
Greece and its lenders had made "substantial progress" but a "few outstanding issues" remained before a deal could be clinched, said Carlos Martin Ruiz de Gordejuela, a spokesman for the European Commission's mission in Greece.
ALL NIGHT EFFORT
The domestic battle in Athens is not over.
Prime Minister Antonis Samaras's allies - the small Democratic Left party and the PASOK Socialists - have yet to back the austerity package, and will examine any concessions made before deciding their stance, a party official said.
Both parties have refused to support demands by foreign lenders to cut wages and reduce severance payments, but have maintained that they do not want to jeopardise the government or Greece's place in the euro zone.
Stournaras urged the parties to change their stance, citing new concessions the government had eked out overnight.
"This morning, after an all-night effort, the troika backed down on two main issues - severance payments and the notice period required before a layoff," Stournaras told parliament.
The package will be put to parliament next week in two separate bills on austerity cuts and labour reforms, he said. That was aimed at ensuring the austerity cuts are passed in parliament even if the Democratic Left party voted against the labour reforms, Greek officials said.
The small leftist party commands 16 deputies in the 300-seat parliament, meaning Samaras's government could still pass both bills without its support since it has a 176-seat majority.
But if it did vote against the bills, the already fragile coalition's stability could be undermined and questions could be raised about the government's commitment to reform.
The party has yet to comment on whether the latest concessions from the troika are enough to win its backing on the entire package of cuts and reforms.
Stournaras openly raised the issue of inflicting losses on the country's official sector lenders by saying Greece is trying cut its debt mountain by asking for lower interest rates and an extension of maturities on its bailout loans.
Athens' debt was already cut by 106 billion euros earlier this year under a deal that imposed losses on private-sector bondholders.
But with its economy mired in its deepest post-war recession and sluggish tax collection and privatisation receipts, there is a growing sense that Greece will need additional debt relief.
Greek debt soared to 171 percent of GDP last year from 148 percent in 2010 and EU officials privately acknowledge it is likely to widely overshoot a target to bring its debt down to 120 percent of gross domestic product by 2020.
Last month, Greek Deputy Finance Minister Christos Staikouras said that Athens may ask the ECB to roll over some of the 50 billion euros worth of Greek bonds it holds.
Officials in Athens have also suggested that their country's banks be recapitalised directly from Europe's bailout fund, which would automatically wipe out about 50 billion euros from Greek books.
(Additional reporting by Harry Papachristou, George Georgiopoulos and Karolina Tagaris; Writing by Deepa Babington; Editing by Andrew Osborn)
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