Greece hopes to avoid more austerity as audit begins

Greece called for international creditors not to enforce further austerity measures as they began a fresh audit of the country's finances on Sunday. Monitors from the so-called "troika" of international lenders - the European Union (EU), Interna
Greece called for international creditors not to enforce further austerity measures as they began a fresh audit of the country's finances on Sunday. Monitors from the so-called "troika" of international lenders - the European Union (EU), International Monetary Fund (IMF) and European Central Bank - were set to start their latest inspection of the Greek economy by meeting finance minister Yannis Stournaras. -- FILE PHOTO: REUTERS

ATHENS (AFP) - Greece called for international creditors not to enforce further austerity measures as they began a fresh audit of the country's finances on Sunday.

Monitors from the so-called "troika" of international lenders - the European Union (EU), International Monetary Fund (IMF) and European Central Bank - were set to start their latest inspection of the Greek economy by meeting finance minister Yannis Stournaras.

The audit will determine the release of a scheduled one billion euro (S$1.7 billion) loan instalment from Greece's ongoing bailout.

"The main goal is to avoid new (austerity) measures," said the Sunday edition of liberal daily Kathimerini.

Another newspaper, weekly To Vima, warned that adopting "even one new measure will cause political cracks" for the Greek government.

These calls followed a similar one from prime minister Antonis Samaras in Brussels last week in which he was adamant that Athens would not adopt any further austerity measures.

"Whatever gap emerges for 2015 and 2016 will be covered by structural changes... not through new (austerity) measures," he was quoted by Kathimerini.

Last week, Greece saw widespread protests as tens of thousands of public sector workers went out on strike against job cuts and transfers introduced by the government. And fresh strikes are planned for this week.

Tensions are also running high because of the murder last week of an anti-fascist musician by an alleged member of the neo-Nazi party Golden Dawn this week.

Contrary to previous troika visits, Greece has made some fiscal progress and recently announced a tentative primary surplus in its budget, enabling it to claim additional financial aid from the EU later in the year.

A primary surplus is one which excludes the cost of servicing debts.

Greece's continuous recession also seems to be easing and recently there was a slight dip in the unemployment rate, which nonetheless remains extremely high, at more than 27 per cent.

"The signs of recovery are becoming clear," finance minister Stournaras told a conference last week.

"No other country has achieved such a large (fiscal) adjustment in peacetime."

Since 2010, Greece has received an overall of 240 billion euros in two EU-IMF packages, but it is now widely accepted that a third rescue package will be necessary, probably amounting to 10 billion euros.

The IMF has predicted Greece will need 4.4 billion euros in 2014 and another 6.5 billion in 2015.

In return for the much-needed rescue loans, Greece has had to adopt harsh austerity measures and implement unpopular reforms.

The auditors are expected to inspect the restructuring of the public sector, the drafting of a new property tax as well as efforts to privatise three ailing state industries, mining company LARKO, truck manufacturer ELVO and defence contractor EAS.