"The key word here is deliver. Deliver, deliver, deliver!" Barroso said, adding he was convinced the Samaras government would make sure that the country would continue to benefit from a bailout administered by the ‘Troika’ – the EU, International Monetary Fund and European Central Bank.
"Greece should stay in the euro as long as commitments made are being honoured," Barroso said in his speech.
His visit coincided with another Troika visit, which is due to assess whether Athens deserves to receive more payments under its €130-billion rescue programme. Reforms in Greece have been delayed by two elections and ensuing coalition-building.
Barroso’s visit also coincided with a setback for Samaras. Earlier in the day, his conservative-led government failed to clinch political agreement on a plan to slash €11.5 billion in spending over the next two years in the hope that this will help convince the country’s lenders to release further bailout funding for Athens.
The savings measures – affecting welfare benefits, pensions and rents on ministry buildings - failed to win the blessing of Samaras' allies, the Socialists and the small Democratic Left party (see background). The talks are due to resume on Monday.
The daily Kathimerini reported that among these are reductions in “special salaries” in the civil service, which are mostly paid to security forces. Samaras is reluctant to cut these wages, which would save just over €200 million per year. There were is also strong opposition to cutting pensions.
“I agree that some of the efforts seem unfair. But I ask people to recognise the other alternatives which will be much more difficult for Greece and will affect even more the most vulnerable in the Greek society,” Barroso said.
The chances of Greece leaving the euro in the next 12-18 months have risen to about 90% and Athens is most likely to quit the single currency within the next two to three quarters, US-based Citi bank said in a report, quoted by Reuters.
In more bad news for Greece, ECB data released on Thursday showed deposits at Greek banks hit their lowest level in six years in June as savers worried about the country exiting the eurozone pulled their money out.
Without sufficient progress, Greece may not receive the final part of its bailout worth €31.5 billion and could be unable to pay its civil servants.
The troika is due to wrap up its visit in early August , but the Commission said it didn't expect a decision on giving Greece the next chunk of cash before September.
Speculation about Greece’s membership of the euro continued on Thursday. Bavaria’s Finance Minister Markus Söder became the latest German politician to suggest that Greece should leave the eurozone, saying, “It can’t or doesn’t want to make it.”
Socialist leader Evangelos Venizelos hit back at the continuing speculation. “If there are some who believe Greece must be sacrificed in order to save the eurozone, they are wrong,” he said, adding that it “would be suicide” for the single currency.