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The Troika does not agree to concessions

24 July 2012 / 19:07:01  GRReporter
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The leaders of the supervisory Troika from the International Monetary Fund, the European Central Bank and the European Commission are in Athens again for the long-delayed review of the implementation of Greece's rehabilitation program. Two elections this year have derailed the reform agenda in the domestic economy. Most probably, this will be the main reason for the delayed payment of the next tranche in September, amounting to 31 billion euro. Meanwhile, on 20 August, Greece is due to repay the 3.2 billion bond loan, although for now the Treasury balance remains negative.

Antonis Samaras is preparing to ask for some concessions from the supervisors, but for now there are no signals that they intend to do Greece any favours. The mission of the supervisory Troika consists in a total of about 40 employees, who are assigned to different ministries and state institutions in order to monitor the status of the Greek economy.

Heads of Mission Poul Thomsen (IMF), Klaus Masuch (ECB) and Matthias Mors (EC) will remain in Greece until 6 August. They will then return to report the situation to the relevant departments, as their next visit to Athens will not be earlier than 20 August. The mission's leaders will stay in the country until the end of August. They will be allocated to ministries and will hold talks with government officials and public partners to gain a clear picture of Greece's dynamics and its ability to reform. Afterwards, they will prepare a detailed report with suggestions about the measures to be taken in the coming months. Currently, the deviation in the implementation of the rehabilitation programme varies between 3.5 to 4 billion euro.

This week, Finance Minister Yiannis Stournaras will present, first to the leaders of the three governing parties, then to the creditors, a programme with a package of measures intended to save the budget 11.5 billion euro for the period 2013-2014. They are not yet known to the general public, but it is expected that a significant amount will be saved by new cuts in pensions and wages in the public sector, since the three governing parties do not agree to start cutting jobs in the public sector.

According to the information, released by sources from the Financial Ministry, the programme for cuts in costs and measures to increase revenues, amounts to nine billion euro. Currently, the government is trying to find a way to save an additional 2.5 billion euro, in order not to appear unprepared before the supervisors.

State administration issued a list of 200 state enterprises and institutions, which will be closed or merged. The Troika will require a further reduction in costs of mayoralties and municipalities, as well as a decrease in the number of beds in state hospitals.

Supervisors are expected to address the issue of reconstructing the local financial system. According to sources, cited by To Vima, creditors have decided to save the Agricultural ATEbank, by splitting it into two. Its healthy part will be sold most probably to Piraeus, which has long ago been giving signals that it wants to buy ATEbank, and the "bad" loans and assets will be compensated by the state. This scenario is not yet confirmed, and there is no confirmation of the rumour, that the TT Hellenic Postbank will be acquired by the National Bank of Greece.

Tags: Economics Markets Troika Athens supervisory mission
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