New Greek Finance Minister Yannis Stournaras warned on Thursday that the country's recovery was "off-track" and Greece faced "difficult years ahead" as sensitive talks with EU-IMF creditors began.
Stournaras spoke just after the first meeting between EU-IMF auditors and Prime Minister Antonis Samaras, who is eager to press the government's case that Greece needs an urgent reprieve from austerity measures demanded in return for the country's second rescue package.
The officials from the EU, International Monetary Fund and the European Central Bank are in Athens to monitor Greece's progress in the implementation of the reforms agreed in return for the bailout agreed in March.
A finance ministry source told AFP the these were introductory talks and the "negotiation will take place later."
Samaras, his office said, told auditors that his administration was "determined to proceed with greater efficiency on fiscal adjustment and speed up structural reforms."
But his new finance minister, sworn in earlier on Thursday, warned the road ahead would be difficult.
"The programme is in fact off-track in certain areas," Stournaras told reporters.
"Difficult years lie ahead, I see light at the end of the tunnel but patience is required," he added.
Stournaras, who officially assumed his duties earlier on Thursday, said he had been warned by auditors to expect a grilling at a meeting with eurozone finance ministers next week.
"I was told to expect a difficult day on Monday at the Eurogroup," the minister said.
Crisis-hit Athens is now drawing funds from a 130-billion-euro ($164 billion) lifeline but Samaras and his allies want to renegotiate the agreement to avoid further job losses and put more emphasis on growth rather than austerity.
"It is our decision to avert further sacrifices at all cost because Greeks cannot take any more," government spokesman Simos Kedikoglou told Real FM radio.
In the talks with the so-called 'troika' of auditors, the new administration will point to worsening economic data in an attempt to argue for an easing in salary and pension cuts.
Under the current terms of its bailout, Greece must vote further cuts worth 11.5 billion euros by 2013 and reduce the state payroll by 15,000 people in 2012.
The new government wants to soften the blow, mindful of rising anger in Greece after over two years of austerity failed to restore the economy to health.
"We believe that by presenting accurate, undeniable data on the current condition of the Greek economy, particularly as regards recession and unemployment indices, our peers will understand that there is no sense in pursuing certain measures," Kedikoglou said.
Eleftheros Typos, the daily closest to the conservative party, spoke of Samaras' first "arm-wrestling match" with the troika in what promised to be a "renegotiation marathon."
"A 'troikan war' for 31.5 billion euros," said centre-left Ethnos daily, referring to the next loan installment Greece's expects to draw in August under the bailout programme.
The Greek economy is in its fifth year of recession and officials warn that it could contract by 6.7 percent in 2012, much worse than an earlier forecast of 4.5 percent.
Horst Reichenbach, the head of an EU mission devoted to overhauling Greece's public administration that stands apart from troika auditors, warned Wednesday that Greek businesses are suffering badly.
"Conditions are particularly hard with demand falling over 25 percent and investment down over 40 percent," Reichenbach said.
Greek officials admit that little was done in the past two months as the country held two elections before a workable government could emerge.
"I'm not in a negotiations or renegotiations mood at all, we are in a fact-finding mood," IMF chief Christine Lagarde told CNBC on Tuesday.
"I'm very interested in seeing what has been done in the last few months, in terms of complying with the programme," Lagarde said of the Greek situation.
The government is expected to promise to redouble privatisation efforts in the hope of persuading creditors that Greece remains on the right path and is ready to rejoin the world economy.
Thursday was the prime minister's first day at government headquarters after undergoing major eye surgery that sidelined him for two weeks.
A wan-looking Samaras earlier on Thursday stood by as his new finance minister Yannis Stournaras took his oath of office.