After 11 hours of negotiations, Greece and the troika of international creditors left the table still at a deadlock. The two sides continue to disagree strongly on the 2015 fiscal gap and security funds issues, meaning that Greece’s hopes to finish the evaluation before the December 8 Eurogroup are vanishing.
“The two sides converged on many issues, but disagreed on many others,” a finance ministry official said early Wednesday after the meeting, which took place in the Organization for Economic Cooperation and Development building in Paris.
The troika sees the government’s budget deficit next year at 3 percent of GDP and has asked Greece to make somewhere between 1.8 billion and 3.5 billion euros in additional cutbacks for 2015. Greece sees a deficit of only 338 million euros, or 0.2 percent of GDP, and claims the first balanced budget since the economic crisis. Official predictions by the troika and the Greek government see the Greek economy growing by 0.6 percent in the current year.
In addition, Greece’s creditors insist on several reforms that the coalition government is reluctant to implement due to public outcry and pressure from the opposition. Reforms such as pension cuts and the loosening of labor laws are very unpopular and have cost the government several points in opinion polls, hence the Greek side’s refusal to agree on more austerity measures.
The issues of mass layoffs and salary reconstruction in the public sector, “red” loans and opening of several professions remain open. Today’s talks will include union laws, where Greece is about to concede to the 50+1 percent for the decision to go on strike, the lockout and revocation of unionists’ leave of absence. However, on the issues of pensions, labor legislation and salary cuts, Greece doesn’t seem to be giving up easily.
With the two sides diverging on November 26, it is impossible for Greece to meet the December 8 Eurogroup deadline. So the only option remaining is to ask for an extension of the financing plan for another year or until Greece completes all required actions.
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