With most of its agenda on reforms still lacking agreement with the Greek government, envoys from the country’s international lenders may leave Athens after finance ministers from the Eurozone meet on Nov. 14 and leave unresolved the question of how a looming budget gap of as much as 2.9 billion euros ($3.88 billion) in 2014 will be closed, and whether to release a pending one billion euro ($1.37 billion) installment.
The Eurogroup will discuss Greece’s long-running drama and dilemma with the country in a sixth year of a deep recession and no end in sight despite $325 billion in two bailouts since 2010 from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that have done virtually nothing to reduce a staggering debt, now at around $430 billion.
Senior finance ministry officers said Greece is prepared and made good arguments why the gap is only 500 million euros ($669.74 million) and they reportedly told the Troka that “finances have been better than ever,” despite tax revenues far off the mark.
Finance Minister Yannis Stournaras, the government’s point man on negotiations, was to meet the Troika officials twice on Nov. 12 in accelerated talks and try to persuade them that there will be a 730 million euro ($977.72) primary surplus by the end of the year – not including interest on debt, the cost of state enterprises and cities and towns, some military expenditures and social security costs – which otherwise would show a huge deficit.
If the Troika does not return in November and the negotiations are extended after Christmas, Greece will be forced to act unilaterally, without Troika approval, on a number of critical issues, such as the 2014 budget, the restructure of the domestic defense industries and unifying the real estate tax with a huge permanent increase.
Stournaras was scheduled to with the Troika officials about lifting a ban on foreclosures and the difference of opinion over the size of the budget gap and convince them that Greece is on the road to recovery but needs their continued assistance and financial aid.
The IMF’s man in Athens, Poul Thomsen, has said he will return after the Eurogroup if a compromise on the fiscal gap can be reached by the end of next week. Otherwise, he will return to Washington and come back to Athens in December, although it was reported that an agreement is very unlikely.
Troika officials requested additional data from the government and on Nov. 19 are expected to give their first assessment of Greece’s proposals for covering the budget gap by curbing tax and social security evasion, for an overhaul of state defense firms and for a unified property tax.