Athens - Arabstoday
Greek Prime Minister Lucas Papademos Athens - Arabstoday Greece will cut state spending by about 12 billion Euros by 2014 to meet conditions set by an EU-IMF debt rescue, Prime Minister Lucas Papademos told parliament on Friday. \"In 2013-2014 a reduction in state spending of around 12 billion Euros is required under the new economic programme,\" Papademos told lawmakers in response to parliamentary questions. \"Every effort must be made to limit wasteful spending and not to further burden salaries of civil servants,\" he said. Greece pledged in 2010 to slash its soaring public deficit in return for a first installment of the EU-IMF 110 billion Euros ($146 billion) bailout package. From above 15 percent in 2009, Greece aims to bring the deficit to below the EU limit of three percent by 2014. Athens drew on 73 billion Euros from that rescue fund until December before a second Eurozone lifeline of 130 billion Euros made available, including funds left over from the previous package. Earlier this month, Papademos oversaw a major operation to cancel part of Greece\'s near and mid-term debt in agreement with private creditors. More than 94.8 billion Euros\' worth of debt issued under Greek law was erased on March 12, and a second phase for debt issued under foreign laws will take place next month. The country is expected to hold early elections in May after the debt swap has been completed.Overall, Greece will receive 185 billion Euros in loans until 2015, by which point EU officials hope its economy will be strong enough to enable it to borrow from money markets at affordable rates. But the prospect of yet another lifeline has not been ruled out altogether. Speaking to Italian daily Il Sole 24 Ore on Friday, Papademos raised the possibility of a third bailout but said he would do everything to avoid it.\"It cannot be excluded that some financial support may be necessary, but we must try hard to avoid such an outcome,\" said Papademos, who came to power last year as the head of a caretaker coalition government.\"Greece will do everything possible to make a third adjustment programme not necessary. Having said that, markets may not be accessible by Greece even if it has fully implemented all measures agreed upon,\" he said. Eurozone finance ministers were meeting in Copenhagen on Friday to discuss steps to strengthen a financial firewall against the debt crisis that has also claimed Ireland and Portugal. They are debating options to bolster their defenses against the crisis from the current 500 billion Euro ($665 billion) maximum in a permanent bailout fund, the European Stability Mechanism (ESM), which will come into effect in July. Ireland on Thursday got some relief after agreeing with the EU and the IMF to renegotiate its debt deal. Payment of a 3.06-billion-euro ($4.06 billion) promissory note due this weekend will be replaced with a long-term government bond, Dublin said. The Spanish government was expected to announce tough budgetary measures later on Friday to correct its public finances which have overshot reduction targets, and in doing so reassure financial markets who are concerned about the ability of Spain to overcome its problems.