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Greece comes up with the goods?

July 26, 2012

Greece has reportedly found a further 11.5 billion euros in spending cuts. Still to be approved by the country's ruling coalition, the announcement comes ahead of the European Commission president's visit to the country.

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The Old University Comples in central Athens, Greece
Image: picture-alliance/landov

A senior Greek finance minster announced on Thursday that the finance ministry had identified 11.5 billion euros ($13.9 billion) in spending cuts over the next two years. The saving for the 2013-2014 period is expected to come largely from pensions, health support and benefits.

"The government has finalised the plan and will present it later today to political leaders," the official told news agency Reuters.

Greek Prime Minister Antonis Samaras is scheduled to meet the other leaders of Greece's ruling coalition later on Thursday, where he will present the cuts for final approval.

Additional spending cuts had been urgently demanded by Greece's foreign lenders, before they released further bailout funding for the troubled economy. International inspectors from the EU, IMF and European Central Bank are currently in Athens assessing the country's adherence to an austerity program under the terms of its second bailout.

Later Thursday, European Commission President Jose Manuel Barroso will hold talks with Samaras during his first official visit to Athens since mid-2009, when Greece's financial crisis broke out. The prime minister will then meet the EU and IMF representatives for talks on Friday.

ECB to do 'whatever it takes'

Greece's savings announcement came as the President of the European Central Bank (ECB), Mario Draghi, threw his weight behind the troubled eurozone. Draghi told an investment conference in London that the ECB would do whatever was necessary to protect the eurozone from collapse, even if that meant acting to lower unreasonably high government borrowing costs.

"Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough," he said.

"To the extent that the size of the sovereign premia [borrowing costs] hamper the functioning of the monetary policy transmission channels, they come within our mandate."

The ECB president's comments gave a major boost to the euro, which jumped 0.9 percent to 1.226 in late morning trading.

ccp/sej (AFP, dpa, Reuters, AP)