Greece: differences with creditors 'fairly large'

ATHENS, Greece -- Greece's finance minister said Wednesday he hopes an elusive deal in crucial austerity talks with the country's bailout creditors can be struck by next week, despite considerable disagreements over where cutbacks will be made.

Yiannis Stournaras said "fairly large" differences remain with debt inspectors from the so-called "troika" of the International Monetary Fund, European Union and European Central Bank.

But he said he believes a compromise can be struck by Monday's meeting of European finance ministers in Brussels.

"It will have been concluded they will accept our positions, they will accept our positions. We shall see," he told journalists after briefing Prime Minister Antonis Samaras on the day's negotiations in Athens.

For most of the past month, Greek officials and representatives of the troika have wrestled over a new harsh austerity and tax reform package worth (EURO)13.5 billion ($17.4 billion) that Athens has committed to implement in 2013-14. Without a deal, debt-crippled Greece will lose access to the rescue loans shielding it from a disastrous default, and could be forced to leave the 17-nation eurozone.

The draft budget presented to parliament this week includes (EURO)7.8 billion ($10.1 billion) worth of cuts next year in pensions, salaries, welfare, healthcare, education and defense spending. It envisages a sixth year of brutal recession _ which will bring the total economic contraction to nearly 25 percent since 2008 _ a budget deficit of 4.2 percent and huge unemployment of nearly 25 percent.

The new austerity will come on the heels of nearly three years of income cuts, tax hikes and an increase in the average retirement age from 63 to 65. It is expected to foresee a further raise in the retirement age to 67, and reforms aimed to boost tax revenues by (EURO)3 billion ($3.9 billion).

The further belt-tightening has angered austerity-weary Greeks, tens of thousands of whom took to the streets last week in an Athens protest that turned violent. Labor unions are planning a new demonstration on Monday, and a general strike when parliament votes on the new measures, expected within the next two weeks.

Samaras' conservative-led coalition _ in power since late June _ should easily win the vote, as it controls 178 of parliament's 300 seats. A handful of its own lawmakers have said they may reject some of the new measures.

"We are here to overcome the tsunami we are facing ... and for the country to stay on its feet," Development Minister Costis Hadzidakis said. "We consider an agreement with the troika to be of pivotal importance."

Hadzidakis spoke at a press conference on a new effort to legislate reforms meant to simplify business licensing, slash red tape, attract foreign investment, improve procedures for exploiting coastal areas near Athens and create hydroplane terminals.

"The country is playing with time," he added. "Unless things are changed, the results will be the same and even worse."