Greek governing coalition leaders launch fresh attempt to finalize new austerity program

ATHENS, Greece – The leaders of Greece’s governing coalition were meeting again Thursday to decide on more spending cuts that the country must impose to keep receiving vital rescue loans.

Prime Minister Antonis Samaras is meeting with the heads of his two centre-left junior partners, a day after more than 50,000 anti-austerity protesters took to the streets of Athens.

Debt-crippled Greece is committed to implement a €11.5 billion ($14.8 billion) package of cutbacks for 2013-14, accompanied by tax reform measures worth a further €2 billion ($2.6 billion).

But despite repeated meetings over the past two months, the three party leaders have failed so far to see eye-to-eye on where to make the cuts. Socialist PASOK and the smaller Democratic Left party — in coalition with Samaras’ conservatives since late June — insist that the new cutbacks must not significantly worsen the lot of low-income Greeks.

Time is running out, as the final proposals must be presented next week to representatives of Greece’s bailout creditors.

Approval from European Union, International Monetary Fund and European Central Bank officials monitoring the country’s three-year effort to right its finances will allow the disbursement of €31 billion.

With that money, whose payment was delayed for months after two successive national elections in May and June, Greece will complete the recapitalization of its battered banking system and pay off long-outstanding debts to domestic suppliers.

Without the cash, the country will soon be unable to pay its bails. That could force Greece to default on its debts and, possibly, ditch the euro.

Greece has relied on international bailouts since May 2010. In return, it imposed a punishing austerity program, slashing incomes, hiking taxes and raising retirement ages. The new measures are expected to include further pension and salary cuts, and raising the age of retirement from 65 to 67.

Finance Ministry employees were striking against the proposed cutbacks Thursday, while hundreds of people with disabilities were planning a protest march through central Athens.