The longest-running story in Greece – the country’s painstaking negotiations with international lenders, picked up again on Nov. 18 in yet another attempt to resolve differences over a range of issues before a pending one billion euro installment is released.
Greek Finance Minister Yannis Stournaras, the point man for Prime Minister Antonis Samaras in the anguishing talks, was to meet with envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) and lock horns again over the size of a looming gap in the 2014 budget and whether it can be closed without resorting to more of the austerity measures the government has promised would be imposed no more.
The Troika puts the hole at 2.9 billion euros but Stournaras insisted it was only 500 million euros – although there was talk they’ve agreed on a compromise of 1.5 billion euros. Still, unless revenues can be raised or structural reforms are made, Samaras might be faced with putting more hurt on Greeks and ramp up social unrest again.
Greece is anxious to come to an agreement before a Dec. 9 meeting of Eurozone finance minsters who must also sign off on any deal as their countries put up much of the loans keeping the economy from collapsing. reece resumes talks with the troika on Monday with doubts remaining about whether an agreement on the projected size of the country’s fiscal gap can be achieved before the December 9 Eurogroup.
Greece said that savings of around 600 million could be made from unspecified adjustments to the social security system which it didn’t deail, although the Troika is skeptical as virtually all previous government promises and goals have failed to be met.
Stournaras said that another 50 million euros in savings could come from stricter implementation of the unified public sector pay structure – which hasn’t happened – going after tax cheats – which hasn’t happened – improvements to the tax administration – which hasn’t happened – and further liberalization of the economy will also produce results, the Finance Ministry argued.
The proposed 2014 budget is due to be presented to Parliament on Nov. 18 but is expected to pass as the government controls 154 of the 300 seats in Parliament and Samaras, the New Democracy Conservative leader, and his coalition partner, PASOK Socialist chief Evangelos Venizelos, order their party lawmakers how to vote under the threat of being ejected if they disobey.
The budget foresees a primary surplus for the first time in a decade, of 780 million euros rather than the 344 million euros initially forecast although many analysts doubt the goal can be reached as the country is in the sixth year of a deep recession with the economy still shrinking.