Troika Changes Mind, Back to Athens

troika22They weren’t coming. They were coming. Were. Weren’t. Envoys from Greece’s international lenders, after squabbling with the government over long-delayed reforms, said they will return to Athens next week to check the books before signing off on the next installment in a second rescue package of $173 billion although many problems remain.

European Union officials, who make up part of the Troika with the International Monetary Fund and European Central Bank putting up the country’s economic lifeline, said early on Nov. 2 it had gotten guarantees from the Finance Ministry over terms of the negotiations and would return after all, on Nov 5. The pattern has been repeated many times between the two sides.

Deutsche Welle reported that talks will start after a teleconference that Finance Minister Yannis Stournaras will have with his Eurozone peers, ahead of the Eurogroup meeting of Nov. 14.

Greece is reluctant to accept the lenders insistence that there is a two billion euros ($2.68 billion) hole in the budget for 2014 that needs to be filled with either more revenues or more cuts.

Greek Prime Minister Antonis Samaras and Stournaras said the gap is only 500 million euros ($674 million) and would be taken care of with cuts in social security, which they had vowed to avoid but now say there is no choice, as they often do when pressed by the Troika to administer more harsh austerity.

There are also differences over lagging privatizations and the staggering scheme to either transfer or fire up to 40,000 public workers over the next two years, along with the Troika’s insistence Greece scrap its notoriously inefficient defense industry and correct problems in the nearly-bankrupt pension system.

The talks are expected to be tough because Samaras is already backpedaling on his promise not to impose more austerity and the government doesn’t want to be blamed if the loan and negotiations are delayed. The Premier, however, said if the Troika presses for measures of up to 2.9 billion euros ($3.9  billion) then he might put his back up and resist.

Already though, the government has raised its assessment of the gap to 700 million euros ($943.95 million) while at the same time insisting cuts in the pension system are enough.

“There are growing differences between Athens and the Troika,” one Eurozone official said, adding that the planned trip was on hold. “The Greeks are saying: ‘We are doing enough’, and the Troika says they need new steps to close the budget,” he said.