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Published: Monday, 9/24/2012 - Updated: 2 years ago

Italy, Greece insist on safeguarding eurozone as Greece tries to finalize critical cuts

ASSOCIATED PRESS
Italian Premier Mario Monti. Italian Premier Mario Monti.
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ROME — The leaders of Italy and Greece are insisting on the "absolute need" to preserve the eurozone, as Greek politicians struggle to put together an austerity package critical to the country's financial survival.

Italy's Premier Mario Monti met Friday with Greek Prime Minister Antonis Samaras on the sidelines of a political conference in Rome.

A statement from Monti's office said the two leaders reiterated their conviction of "the absolute need to safeguard the integrity of the eurozone, stabilize markets and proceed in the process of European integration."

Samaras' coalition government has yet to agree on the final list of €11.5 billion ($15 billion) worth of cuts so the country can get bailout cash. Without the money, Greece might default and abandon the euro, unleashing new financial gloom across the continent.

Monti was later meeting the leaders of Ireland and Spain.

Meanwhile, Greece's bailout creditors said they are taking a "brief pause" of about one week in talks regarding the country's new austerity program, saying that "good progress" has been made so far.

The officials from the so-called troika of the International Monetary Fund, the European Union and the European Central Bank, also said in a statement that they will continue contacting the Greek officials from their headquarters during that time. The announcement followed talks with Greek Finance Minister Yiannis Stournaras.

An official at the ministry said the departure of the troika representatives from Athens is not significant since they had not initially planned to stay beyond the end of the week.

The debt inspectors from the IMF, EU and ECB have been meeting senior Greek officials since early September, ahead of a crucial progress report that will determine whether Greece keeps receiving vital rescue loans.

But weeks of deliberations among the three parties in Greece's fragile, conservative-led governing coalition have failed to produce an agreement on the final list of cutbacks.

The Greek official, who spoke on condition of anonymity, said Athens hopes to have the list ready by the time the troika inspectors return. He said an agreement was reached earlier this week with the troika on some €9 billion ($11.7 billion) worth of cutbacks — which will include an estimated €1.1 billion ($1.4 billion) from raising the average retirement age from 65 to 67.

He said that in addition to the €11.5 billion cutbacks, which will mostly come from pension and salary cuts, the troika also wants Greece to increase its state revenues by some €2 billion over the next two years.

Greece has depended on international rescue loans since May 2010, and in return imposed a harsh austerity program that saw incomes slashed, taxes repeatedly hiked and the retirement age increased to 65. The belt-tightening, amid a deep recession and high unemployment, has sparked a wave of strikes and often violent demonstrations.

The country's two main labor unions have called a new general strike next week.



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