New Greek cuts almost impossible: govt

18 Jul 2012, 3:21 am   -   Source: AAP

The head of a party in Greece's coalition government says the country's recession makes it "almost impossible" for it to achieve the $A13.8bn in cuts.

The head of a party in Greece's new coalition government says the country's recession made it "almost impossible" for it to achieve the 11.5 billion euros ($A13.81 billion) in cuts over the next two years demanded by its rescue creditors.

Socialist party leader and former Finance Minister Evangelos Venizelos made the comment in a radio interview on Tuesday, a day before he is to meet conservative Prime Minister Antonis Samaras to discuss the cuts.

"It is very difficult, almost impossible for anyone to put cuts together worth (euro) 11.5 billion in 2013 and 2014," Venizelos told private Vima radio.

"That difficulty has always been there, but the (situation) has deteriorated because the predictions for the recession in 2012."

Samaras won a June 17 general election, promising to renegotiate Greece's bailout deals. But the idea has received a cool response from Greece's emergency creditors.

Debt inspectors from the European Union, European Central Bank and International Monetary Fund (IMF) - known as the troika - are due to return to Athens next week to discuss the new round of proposed cuts. The heads of that inspection mission will meet with Greece's Finance Minister Yannis Stournaras on July 26, ministry officials said.

Greece has been relying on the emergency loans for just over two years, but harsh austerity measures designed to meet fiscal targets demanded creditors have left the country stuck in recession for a fifth year.

"From the start, in 2010, the big problem in our relationship with the troika has been that all the projections, all the macroeconomic numbers - and the most important one, the recession - have not turned out to be correct," Venizelos said.

"That means we keep having to make more adjustments, because as the gross domestic product goes down so does the (deficit-to-GDP) ratio gets worse and that brings trouble for the whole effort."

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