Evangelos Venizelos, a former finance minister facing dissent in his PanHellenic Socialist Movement (Pasok), had distanced himself from both coalition partners and Greece’s international lenders by demanding the cuts be postponed until 2015-16. Mr Venizelos said Greece had to demand more time to achieve targets under its bailout package, but he was setting aside his request for now in the interest of the country and to avoid bringing down the six-week-old government.
Mr Samaras is trying to secure the disbursement next month of a much-delayed €31.2 billion loan tranche. Troika officials are due to return early in September to assess progress and prepare a report that will determine whether Athens can draw down the funds to recapitalise its banks and support the budget.
The looming cash crunch means Greece may have to raise an extra €3.2 billion in treasury bills this month to cover the repayment due on August 20 of a bond held by the European Central Bank, as the EU and IMF would be reluctant to meet a request for extra funding by Athens before its parliament has approved the spending cuts.
Yet Mr Samaras is expected to give a new push to the country’s lagging privatisation programme, regardless of the dispute with the Pasok leader over the medium-term package. Preparations to dispose of three large, state-owned enterprises – Hellenic Postal Savings Bank, the profitable state gaming company OPAP, and the state lottery – are to be stepped up with the aim of agreeing a sale by the end of this year.
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