The crucial negotiation between Stournaras and Troika

Why Masuch is not coming to Athens - The line of defense of the Greek government against horizontal measures and a third Memorandum - The auditors’ intentions

The negotiations between the Greek government and Thomsen’s group will begin shortly without the Troika "bad guy", a role currently played by ECB spokesman Klaus Masuch. Reportedly, at a meeting last night of the economic team chaired by Samaras, Masuch’s arrival in Athens was not confirmed, since, according to EU sources, he had to be in Strasbourg to participate in proceedings of the European parliament.

His absence from the meeting of Pooul Thomsen (IMF) and Matthias Morse (European Commission) with Yannis Stournaras at 12 pm, will mark the character of the new round of negotiations, which will be mainly procedural and focus on current and pending issues for the tranche of 1 billion euros, without moving on issues of 2014 and onwards.

This means that the big negotiations about the measures next year is postponed until the end of the month or early December when Troika comes back to Athens, in parallel with the developing of the final draft of the new budget.

This was hinted upon by finmin Yannis Stournaras as he exited yesterday evening the preparation meeting for the coming of Troika, stating that the Greek government has presented the preliminary budget and sent the Troika the relevant data that demonstrating the estimates of the Greek side are realistic.

This means that:

The Greek side still hopes for a primary surplus in 2013 and will request from its lenders in April to fill the financing gap of the program
   
The Greek government does not even discuss the Troika estimates for a budgetary gap of 2 to 2.9 billion euros in 2014. Despite the "half refutation" of the representative of the European Commission, representatives of Greece’s lenders constantly change the height of the financial gap from 6 billion euros or 4.5 billion estimated by ECB’s Asmounsen at about 2.5-2.9 billion euros, with a tendency for further reduction
   
Greece argues that besides the primary surplus, recession and deficits also do better than the initial estimates. They believe that this will continue in 2014 as well as the improvement in tax collection observed in September and to convince the Troika, they bring the initial findings in October, which, according to them, strengthen the Greek positions

And a third Memorandum under way…

But why is it that Troika ignores these figures and why is it insisting on the need for new financial measures which are refuted by the Greek government?

Although no one gives a straight answer, the Greek government sees that the pressure is not so much for the financial gap in 2014, but for its debt sustainability. That's why Greece’s lenders insist on the specialization measures of 2015-2016 as well, assuming this is a precondition before its European partners commit as to how they will finance the Greek program.

At this stage, however, the Greek government rejects the terms and rules for further funding refer to a third Memorandum, arguing that it is premature to plan this from now, because the situation is progressing better than initially planned and therefore there is no need nor will it favor anyone to start now such an extensive consultation.