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Greece began tough negotiations with international creditors

09 September 2012 / 19:09:36  GRReporter
3829 reads

Victoria Mindova


"We are working day and night" was the only information which the representative of the European Central Bank, Klaus Masuch, give to the journalists gathered in front of the office of Greek Finance Minister Yiannis Stournaras. He and his two colleagues, Paul Thomsen from the IMF and Mathias Morse from the European Commission, are back in Athens to resume talks with the Greek government.

After a two-hour meeting Paul Thompson said the meeting was good, but declined to give details about the topics discussed. Initial information indicated that the representatives of the creditors will stay in Greece until the end of the week, after which they would have to prepare the final version of the report for the economic development. After the Sunday meeting, it became clear that the Troika's stay may be extended, because there are still unspecified issues. According to unconfirmed information by the Ministry, it comes down to measures amounting to two billion euro which are "hanging in the balance" as it is impossible for them to be implemented for the moment.

The Ministry of Finance says that negotiations are still in their early phase. "We have more work" was heard from the Greek side on exiting the meeting. The climate of the meeting was lighter than the August visit, but the Troika does not recognize all measures which the government provides for the 11.6 billion euro package. "Lenders expressed some reserves, which we also expected, about some of the measures in the package for which they want a more detailed description", confirmed sources from the Ministry of Finance.

So far the public sector cuts, the cost of maintaining social policy and income tax unfairness remain the toughest issues. Government officials familiar with the tax system explained for GRReporter, that Greece has to show a real increase in revenue from fighting tax evasion. Only this way will lenders ensure that the country has the power to fight the phenomenon of "I do not pay".

In Athens, a mutual nervousness prevails about the final form of the fiscal consolidation plan which must be implemented in the next two years. Representatives of the international lenders have reservations about the promises given by the Greek side. In the coming days it is expected that the fundamental problems of where the cuts will come from will be unraveleled, in order to achieve at the end of the year a significant reduction in the budget deficit.

The meeting of Yiannis Stournaras with the supervisory Troika, was followed by a meeting of the three political leaders from the ruling coalition. Prime Minister Antonis Samaras met the leader of PASOK Evangelos Venizelos and the Democratic Left leader Fotis Kouvelis to discuss Greece's united stance regarding creditors.

"The troika has to understand that its claims are directed to a fragmented society", said Fotis Kouvelis after the meeting with leaders. He stressed that nothing should be taken for granted and refused to answer directly the question as to whether the Democratic Left is considering withdrawing its support from the governing coalition.

Tags: Economy Markets Troika creditors negotiations financial aid Greece
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