Greece defies its creditors: 'No more austerity measures,' says PM

With the IMF, the EU, and the European Central Bank all in Athens to check on the progress of Greece in implementing agreed upon austerity measures in return for bail out money, Prime Minister Samaras has chosen this moment to declare an end to austerity measures.

This leaves vital reforms undone, including scaling down public sector employment by 150,000 workers by the end of 2015. With 20% of the country employed by government, and the private economy still in recession, Samaras is challenging his creditors to give him bail out money anyway or face a Greek collapse.


Representatives from the so-called troika of Greece's creditors -- the European Union, the European Central Bank and the International Monetary Fund -- are currently reviewing the steps Greece has taken to meet its multi-billion bailout obligations.

Thorny issues that Athens still needs to address include shrinking the number of jobs in the public sector, speed up privatisation plans and recapitalise four of its main banks.

The auditors have decided to extend their stay by another week and a scheduled meeting with the PM on Thursday was scrapped.

But Samaras on Saturday denied there was a stalemate in talks.

"There is discussion over certain things. I would not call it a hitch, mainly a discussion over how to apply agreed (measures)," he told financial weekly Axia in an interview.

Under the bailout conditions adopted last year, Greece needs to cut public sector workers by 25,000 in 2013 and a total of 150,000 by the end of 2015.

The job cuts have sparked friction with Samaras' junior coalition partner Fotis Kouvelis, head of the moderate Democratic Left party, who is citing Greece's soaring unemployment rate.

Facing a sixth consecutive year of recession, the heavily-indebted country has been relying on international rescue packages to avoid bankruptcy.

A return to growth initially foreseen for 2012 is now not expected before 2014.

Since 2010, the EU and the IMF have committed 240 billion euros ($314 billion) overall in rescue loans to Greece.

The next payment to Greece, of 2.8 billion euros, is due at the end of March.

The markets are not going to be pleased at this news. It puts Greece back on the front burner of crisis, and with the 4 largest banks in terrible shape, Greece faces not only a loss of the euro, but a full fledged financial meltdown.

Greek politicians have lost the room to manuever. The ball is in the troika's court and it is up to them to decide if Greece stays in the euro zone or not.