The Euro crisis

Greek Coalition Allies Balk as Samaras Says Austerity Talks Done

Greek Prime Minister Antonis Samaras’s coalition partners said they still oppose parts of a budget and austerity package after the premier said negotiations required to secure more bailout funds had been completed.

Bloomberg,

31 October, 2012

Greek Finance Minister Yannis Stournaras, who will submit the budget to parliament tomorrow and the austerity package next week, briefed Samaras on plans for a conference call by euro area finance ministers on Greek-related issues tomorrow. The measures are linked to approval for the payment of 31.5 billion euros ($41 billion) of bailout funds from the European Union and International Monetary Fund.

“We completed negotiations on measures and the budget,” Samaras said in an e-mailed statement today. “As long as this agreement is approved and the budget is ratified Greece will stay in the euro.”

While Samaras said a deal had been completed, his coalition partners are highlighting divisions. Democratic Left, which has said it will support the budget, today reiterated opposition to proposed labor reforms. Pasok leader Evangelos Venizelos said talks on the deal will continue up to a Nov. 12 meeting of euro area finance ministers.

The “hasty” announcement while Pasok and Democratic Left were holding meetings of their lawmakers is “at the very least unfortunate,” Venizelos said in an e-mailed statement. “When Mr. Samaras announces the completion of negotiations on the measures and the budget he obviously means on the troika level.”

The so-called troika of the European Commission, the European Central Bank and the IMF is compiling its latest report on Greece’s progress in meeting internationally agreed targets that are a prerequisite for the next installment of a 130 billion-euro rescue.

Samaras urged lawmakers to “act responsibly” and vote for the measures which he said will ensure the country avoids chaos. His coalition government now has 176 seats in the 300-seat chamber and Samaras, whose New Democracy party controls 127 seats in parliament, relies on Pasok and Democratic Left’s support to turn any pledge to lenders into law.

A summary from the Guardian

OK, time to round up the day:

• Greece's prime minister has announced that Athens has reached a deal with its international lenders over its austerity package, after four months of talks.

Antonis Samaras said Greece had secured the best deal possible, and warned of 'chaos' if the €13.5bn programme of cuts and tax rises was not passed. (see 13.14)

• But members of Samaras's coalition do not share his views. The Pasok party has claimed that talks are still continuing, and accused Samaras of undermining Greece (see 17.49) . Democratic Left, the other junior coalition partner, is refusing to support the labour reform section of the package (see 13.41).

• Spain's economy has continued to shrink. Data released this morning showed that Spanish GDP fell by 0.3% in the third quarter of 2012 (see 8.06am) Economists fear that the current quarter will be even worse, and warn that the Spanish economy is in a precarious state (see 8.45am).

• German unemployment rose last month. The jobless total rose by 20,000 - more than expected. (See 9.12am)

• Italy held a successful bond auction, with borrowing costs at their lowest since May 2011. Expects said that Silvio Berlusconi's threat to trigger an early election was being ignored.... (see 10.48am)

• Argentina was put on negative ratings watch by Fitch. Move comes after Argentina lost a court case over how it repays debts which it defaulted on in 2002 (see 15.13).

• The heads of the IMF, OECD, ILO, WTO, the World Bank and the German government warned that the crisis wasn't over. In a joint statement, they said the recovery was fragile and debt levels too high