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Creditors left without an agreement with the Greek government

29 September 2013 / 16:09:12  GRReporter
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The first cycle of talks between the Greek government and representatives of the supervisory Troika ended with many open and unresolved issues. Lenders departed from Athens after an agreement only on the completion of budget 2013, and will return in order to continue negotiations after Eurogroup’s meeting on 14 October.

Yesterday, a senior officer of the Greek Ministry of Finance said immediately after a brief meeting with the Troika that negotiations will continue through correspondence in the next 15 to 20 days, and the goal will be twofold: the Greek side will have to show that it has marked progress in terms of the implementation of commitments, while representatives of creditors will need to coordinate their positions.

Open and outstanding issues are a lot and include the following:

* Budget 2014: The same employee of the Ministry of Finance indicated on Friday that three problems are of major importance:

  • The bill on the uniform property tax as of 2014 (amount of revenues, the possibility of their collection)
  • Initiatives that need to be taken in terms of social security funds
  • Estimates of the General Accounting Directorate on "tax compliance" (an increase in tax revenue due to the gradual recovery of the economy).

* The four requirements necessary for the release of the 1 billion euro tranche, an issue that has been unresolved since July:

  • Plans for the restructuring of the state-owned company producing military and civilian special purpose machinery ELBO, EAC (Greek defence systems) and the mining venture Larko. New data about them have been presented to the Troika;
  • An assessment of the "Mobility of civil servants" programme, by means of paying particular attention to those working in universities;
  • The code of lawyers will be translated into English, in order for it to be assessed by representatives of creditors;
  • The payment of public sector obligations to water companies in Athens and Thessaloniki, which is expected to be finalised in the next 10-15 days.

* Promotion of structural changes that have already been agreed.

* The pace of recapitalisation of the banking system and increase of market liquidity.

* The privatisation programme, which the Troika wants to be accelerated and made more flexible.

* Common action in the field of social security funds.

Another employee of the Ministry of Finance said that revenues collected from the uniform tax on real estate in 2014 will be far below the planned 4 billion euro, and net revenues in the budget are expected to amount to 2.85 billion euro.

He also pointed out that insurance funds are expected to gain a "much smaller than expected, but manageable surplus."

The draft of the new budget, which will be submitted to Parliament on 7 October, will reflect on practice only the completion of budget 2013. In particular, a recession of about 4% is expected (a slight 0.6% increase in GDP is also foreseen in 2014).

According to current information, the primary surplus is expected to reach 100 million euro.

Officials of the Ministry of Finance also mentioned that it has been agreed that extra taxes will not be levied on businesses for the benefit of the insurance company of liberal professions, and that the common payroll table will not apply to uniformed services.

Technical teams will remain in Greece in order to continue negotiations with representatives of the ministries, until the return of leaders of the Troika. 

Tags: supervisory Troika talks Greek government agreements Eurogroup
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