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Greece committed to further spending cuts

13:53 AEST Mon Aug 6 2012
AAP
Greek Finance Minister Yannis Stournaras (Getty)
Greek Finance Minister Yannis Stournaras (Getty)

Greece's international creditors have called their talks with Athens productive and say the country is committed to hammering out further spending cuts to secure a new tranche of aid.

The so-called troika of creditors - the EU, IMF and the European Central Bank - met about the reforms Greece needs to implement to secure 31.5 billion euros ($A37 billion) in aid and stay afloat.

"We made good progress," IMF official Poul Thomsen told reporters after Sunday's meeting.

"The discussions on the implementation of the program were productive and there was overall agreement on the need to strengthen policy efforts to achieve its objectives," the creditors said in a joint statement.

"The Greek authorities are committed to proceeding with determination in their work over the next month, and the EC/ECB/IMF staff teams expect to return to Athens in early September to continue the discussions," they added.

The creditors' statement echoed comments by Finance Minister Yannis Stournaras published ahead of the meeting.

"The country is committed to implementing a series of measures and reforms to revive the economy and permanently remove the threat of bankruptcy," Stournaras told the Ethnos newspaper.

He added the next few weeks were crucial for Greece's future, as the troika determines whether to unlock the tranche of aid next month.

Greece has to slice another 11.5 billion euros off its spending plans for the next two years to win the money but further austerity measures are deeply unpopular in a country also struggling with deep recession and high unemployment.

The funds are due to be disbursed in September as part of a 130 billion euro bailout package, Greece's second international lifeline in two years, but the required cuts have been delayed by political turmoil that triggered two elections in six weeks.

Stournaras acknowledged that Greeks have had to endure "major sacrifices" as the new coalition government that emerged after the June election imposes tough austerity measures, including salary, pension and welfare cuts.

"The coming weeks are crucial for the country's survival because if we go down a different path than logic tells us, it could drive us outside the eurozone and into bankruptcy," he said in the Ethnos interview.