Troika Talks End Without Deal for Greece

Troika

ATHENS – Envoys from international lenders said they finished a round of negotiations with Greece on the prospect of new austerity measures without reaching any agreements and won’t return until next month – leaving the government to present a budget to Parliament on Nov. 21 without a deal.

Tough negotiations over the past two weeks focused on 2014 budget cuts and structural reforms. Greece hopes by Dec. 9 to strike a deal that would allow release of a new loan installment of 1 billion euros ($1.35 billion).

Finance Ministry officials said progress was made during talks with Troika representatives of the International Monetary Fund, European Central Bank and European Commission but no details were given.

The frustrating result left Prime Minister Antonis Samaras, the New Democracy Conservative leader, and his coalition partner, PASOK Chief Evangelos Venizelos, in a tough spot: they must give the budget to lawmakers already antsy that the Troika will insist on more harsh conditions in return for keeping open the money line.

The government had hoped to reach an agreement on an array of reforms so that the Troika would release a pending one billion euro ($1.37 billion) installment but that could now be delayed for months.

Because the Troika did not sign off on the 2014 budget, Samaras may have to submit a supplementary budget early next year, leaving the process and economy in limbo.

The government is far behind on goals of firing public workers, privatizing state enterprises and didn’t present a plan acceptable to the Troika on how to close a budget hole the lenders say is as much as 2.9 billion euros but which Greece says is only a fifth of that.

Samaras is frantic to avoid imposing more pay cuts, tax hikes and slashed pensions which would force him to break his promise not to hit beleaguered Greeks again after vowing he would never ever do so again.

But Greece is totally reliant on Troika monies, some $325 billion in two bailouts over the last 3 ½ years because the economy is still on the verge of collapse, drowning in $430 billion in debt caused by decades of wild overspending and New Democracy and PASOK Administrations hiring hundreds of thousands of needless workers in return for votes.

Sources told Kathimerini that the budget will include a range of measures aimed at producing well over 1 billion euros in extra savings next year. Some 600 million euros will be saved by cuts in the social security system.

Another 350 million euros in extra revenues is projected from improvements to tax administration and going after tax cheats although Greece has failed in both areas already to make any major improvements.

The government also argued that it predicts the economy – now in the sixth year of a deep recession – will somehow get better and even grow in 2014, a prospect few analysts believe. Virtually all previous prognostications have fallen far short of optimistic hopes. Some public bodies will be shut down.