Hard road ahead for new Greek government

ATHENS - New Prime Minister Antonis Samaras insisted ahead of a confidence vote Sunday that Greece belongs in the eurozone and will meet the twin challenges of fighting recession while winning the trust of EU-IMF creditors.

"The goal of the government is to guarantee the place of Greece in the eurozone against those who want to undermine it," Samaras said in his first major address as Greece's new leader after winning an election in June.

The speech on Friday outlining the government's programme over the next four years launched a three-day parliamentary session that ends late Sunday with a confidence vote that Samaras' three-party coalition should breeze through.

"Our problem is not adopting reforms, which we will do without question. It is not reaching an objective, which we will meet. But it is finding an end to the recession," The 61-year-old Prime Minister said.

In the 300-seat chamber, Samaras' conservative New Democracy party leads a coalition of 179-seats with the socialist PASOK party and the much smaller Democratic Left.

Since the June 16 election, some coalition members have made plain their desire to revisit terms of the second 130-billion-euro bailout agreed with creditors from the European Union, International Monetary Fund and European Central Bank.

New Finance Minister Yiannis Stournaras told lawmakers Saturday "an extension" was necessary because of Greece's recession which is now in its fifth year.

And socialist leader Evangelos Venizelos, who helped negotiate the bailout deal last winter, said Greece must seek new terms to its bailout and extend a deadline to balance its budget by three years.

But winning the reprieve will not be easy as officials from Greece's creditors have shown stiff resistance to renegotiation talk and refuse to give up money Athens urgently needs until progress is seen.

"I'm not in a negotiations or renegotiations mood at all," said IMF chief Christine Lagarde on Tuesday. "We are in a fact-finding mood."

And an EU official said Friday that Greece will not receive its next tranche of bailout of aid, reported to be 31.5 billion euros on August 20, unless it continues the implementation of economic reforms demanded.

"There will be no disbursement until the Eurogroup (of finance ministers) has determined that the programme is back on track," said the official, who spoke on condition of anonymity.

In his speech, Samaras admitted that Greece had fallen behind in its programme, led off course by an extended election season after a first vote in May failed to produce a workable majority.

Samaras argued that it is in order "to reach the programme's objectives that we must change aspects of it that are making our recession worse".

"We will do everything to change what needs to be changed, fight against recession so that the country meets its targets... while reinforcing our country in the heart of the euro and the European Union," Samaras stressed.

Samaras spoke as auditors pick through government books to determine how well Greece has met pledges. The EU-IMF audit is expected to last weeks and actual negotiations with creditors are set to begin only at the end of the month.

Samaras said faster privatisations, including of the national railway company, and winding up inefficient state companies would be a central plank of his government.

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