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Victoria Mindova

"We have reached an agreement, it’s over, there will be no other meeting on the measures," Minister of Finance Yiannis Stournaras said upon leaving the Prime Minister’s office, where the session of political leaders who support the tripartite coalition government of Greece was held. The hot topic of the last few weeks remains the measures that the government should adopt within the plan for fiscal adjustment in the coming two years.

Like in the fable about the eagle, the crab and the pike, the forces in the coalition government have not been able to agree from the middle of the summer to today on how to zero the Greek budget deficit. "The basic agreement that we have reached gives me a basis for negotiations," Stournaras told reporters.

The heads of the supervisory mission for Greece of the International Monetary Fund, the European Central Bank and the European Commission are returning to Athens to review the final package of measures that the Greeks have prepared. They will provide the basic framework of the country's economic programme until 2014, which mainly involves reduction of pensions, wages in the public sector and reduction of costs in the health and social sectors.

"The lenders do not accept measures related to structural changes in the public sector," a source close to Prime Minister Antonis Samaras told GRReporter. Promises of reforms in the public administration, which will save money in the budget, have been made often in the last three years, but very few of them have been implemented in practice. "They no longer believe us when it comes to this kind of measures," the same source said. Therefore, the adjustment programme will focus mainly on the reduction of costs that will have an immediate impact on the budget.

Fotis Kouvelis from the Democratic Left, which supports the government, insists that the agreement of the package should include a clause, providing flexibility and changeability of the measures. For example, if the revenue from fighting tax unfairness increases, then pensions should not be further reduced. "The clause for the changeability of measures is a very important parameter. When we obtain an extension of the period for the programme implementation, it will be a very important advantage to us," Kouvelis said upon leaving the meeting of coalition partners.

Political circles in Greece believe that the extension of the period of implementation of the fiscal adjustment is inevitable. It will be for a period of two years until the end of 2016. However, this topic cannot be formally discussed before the end of the negotiations with the lenders. According to the information available so far, the government and the lenders should reach an agreement by 8 October, when the planned meeting of euro zone ministers will take place. Supervisors are adamant that after the mission of lenders agrees on the final version of the fiscal adjustment plan, Euro group must approve it and then, the Greek Parliament must vote it as a law.

Swarms of reporters, photographers and cameramen had gathered outside the office of Antonis Samaras while the meeting of political leaders was taking place. Talks with local reporters have made it clear that the greatest concerns within the country are where the cuts in salaries and pensions will end as they have been greatly reduced in many sectors. The Greeks do not welcome the increase in the retirement age to 67 years warmly either, but the major concern remains the lack of prospects for a return to economic growth. Greece is in its fifth year of recession. Additional cuts in the income of people along with the avalanche of rising unemployment have been increasing the sense of insecurity in the nation.

Foreign reporters, on the other hand, are focusing more on the political situation in the country. The key issue for them remains "How will the tripartite coalition government withstand public pressure following the adoption of the new austerity measures?" None of them has great confidence in the ability of this government to reach consensus in the long run. The main force of the government is the right New Democracy, which won the highest number of votes in the June election but failed to gain an absolute majority. The government has been formed due to the support of the socialists of PASOK and Democratic Left - parties that declare themselves as pro-European.

However, the ideological base of Democratic Left excludes the majority of the measures related to the reduction of pensions and cuts in the public sector. According to unofficial information, 15 of the 17 deputies of Democratic Left will vote against the fiscal adjustment plan. Even without their support, the measures may be adopted, but the stability of the government will be shaken again. On the other hand, if PASOK and Democratic Left turn their backs on Samaras they will be in complete political isolation and will actually lose the little support they are now enjoying. The logical scenarios of next week's political developments in Greece is for PASOK and Democratic Left to declare that they do not agree with the measures, leaving New Democracy to take full responsibility for the new cuts, but to not formally withdraw their support from the coalition government, foreign observers told GRReporter.