Race to finish the negotiations in December

The meeting of Antonis Samaras with PASOK president Evangelos Venizelos affirmed the joint decision to cover the difference with structural measures rather than by horizontal wage and pension cuts as requested by the Troika. Samaras instructed the ministers to redouble their efforts at all secondary issues to close the deal in December or in the first fortnight of January. The extension is not good internationally for the Greek economy, as the government seeks to attract foreign investments and accelerate privatizations of, while being concerned after the statements from European officials that keep a tough stance, noting however that during the last week they appear more conciliatory.

The Greek Government believes Samaras’ meeting with Merkel this coming Friday in Berlin is a crucial one and that the attitude of the German government can be a catalyst in order to reach a compromise. The meeting will also include a discussion of the fiscal gap and the settlement of the Greek debt, which the Greek side wants to close before the elections.

 

Problems

Regarding the current negotiation, one part is about the fiscal gap for 2014 with disagreements on two points between the Greek government and the Troika. The first concerns the size of the gap. The Greek government began at 500 million euros and has fallen to 1.3 billion and it is estimated that close to 1.5 billion euros. The second difference has to do with the way the gap will be closed. The Greek side says only with structural measures based on the prediction for improved performance of the tax collecting mechanism, by addressing contribution evasion to pension funds, mergers of public services and agencies and implementation of the single wage scale in the public sector.

The other part of the negotiation has to do with the prerequisites that have not yet been met by responsibility of the Greek side. The mandate of the Premier to the minister is to make up for lost time.

Under its policy decision the Greek government clarifies that:

-the bill for the taxation of property shall be deposited as agreed with the ND and PASOK parliamentary groups

-the bill for property auctions that will come at the end of the year will include protection of primary residence of the poor

-for Defence Systems it proceeds with the solution of consolidation while in operation and not the sudden shutdown

Until next Thursday, the MoF will deposit in parliament the 2014 budget without Troika’s agreement since it is extremely difficult to close the deal in the coming days.