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The Troika will not accept any deviation from the objectives set out in the memorandum

27 September 2014 / 12:09:17  GRReporter
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Tax relief provided by the government can be discussed, but the Troika will not allow any exception to the financial objectives of the Greek programme, Brussels emphasizes.

Key priorities of the evaluation will be the financial deficit, the finding of a solution to the "red" loans and the completion of reforms, in addition the discussion on the viability of the debt will begin in early November. As far as leaving the memorandum is concerned - this will depend on the markets.

These are the main remarks from Brussels with a view to the Troika's return to Athens next week in order for the official evaluation – the last one under this programme - to begin on Thursday. It will be developed in two phases.

The first will be from 30th September to 8th October, after which the heads of the Troika will return to their headquarters, and they will be back in Athens for the meeting of the Eurogroup on 13th October.

As for the topics, initially there will be a detailed examination of the budget development for 2014 and how the goals of the surplus are being met, as costs will be subject to special examination.

On tax benefits, Brussels claims that the impact should be examined in detail, adding that in any case tax relief cannot be obtained ​​by alleviation of the financial targets of the programme.

As for the deficit for 2015, Brussels envisages that, on the basis of estimates from April, it will amount to 12 billion dollars. However, they add that the data from next year's budget should be considered, as well as the results of stress tests on Greek banks.

The Troika insists on discussing the restructuring reforms in which about 100 operations will have to be performed. This package is huge and the Troika realizes that Greece cannot implement it immediately, so there might be chronological flexibility here.

More specifically, judicial reforms will be discussed, especially the Civil Law and Public Administration Code, which is considered a pillar of the programme. The issue of retirement will also be examined.

The heads of the Troika will meet with the management of the State Agency on Private State Property to discuss privatization; they will also visit the Bank of Greece.

Leaving the programme

On debt relief, Brussels emphasizes that it will be at the epicentre of discussions during the evaluation, but specific discussions will begin in early November, when there will be a complete picture of the economic parameters.

Regarding the suggestion of Antonis Samaras that there should be no new programmes, Brussels stresses that the decisive factor will be Greece’s ability to borrow at a reasonable interest from the markets. For the full return of Greece to the markets, the proper execution of the budget for 2014 and 2015 and the continuation of reforms will be crucial.

On what will happen if Greece leaves the memorandum Brussels replies that monitoring will continue, but in a different form, as in other countries that have been under such a regime, like Ireland and Portugal.

Nevertheless, the Troika will probably make the same proposal for Greece, which was presented to the Eurogroup both for Ireland and Portugal, to ensure a "cushion" of security and credit line if difficulties are found in borrowing money from the markets. However, both countries refused to accept the proposal during the discussion of the Eurogroup, believing that an open credit line may send a wrong signal to the markets.


The Troika will put special emphasis on collective dismissals and the improvement of the quality of social dialogue in Greece between employers and workers will be discussed, as the Triad believes that today there is no dialogue or it is only one of conflict.

Basic arguments are challenged

Creditors do not accept a lower budget surplus than 3% of GDP or € 5.65 billion, which the programme signed by the government provides.

A leak from the Ministry of Finance says that the draft budget will aim at 2.3 percent surplus or 2.5% of GDP, but lenders would like the difference of 900-1,300 million to be covered by new measures.

Meanwhile, lenders insist that the financial deficit will amount to € 12 billion, a sum with which the government disagrees and claims that it is covered by other ways - for example by bonds.

Lenders insist on arrangements on sensitive issues such as:

* Pension reform

* Jobs

* "Red" loans

* 1,000 necessary activities that must be carried out

Tags: Triad assessment primary budget surplus tax relief
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