Greece, Troika Tango Goes On

Greek finance chief Yannis Stournaras says no more austerity

ATHENS – Greece is racing to complete reforms and get a pending one billion euro installment from international lenders released before taking over the symbolic rotating European Union Presidency on Jan. 1 and insists there will be no need for more austerity measures.

Prime Minister Antonis Samaras met Finance Minister Yannis Stournaras and Administrative Reform Minister Kyriakos Mitsotakis to talk about how the government will prepare for the return of envoys in December of the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB).

The officials left last week without securing an agreement on how Greece will cover a hole in the 2014 budget of as much as 2.5 billion euros – which the government disputes – and Samaras said Greece could cover any gap by going after tax cheats and cutting waste.

Samaras, who met German Chancellor Angela Merkel in Berlin last week, pushed his ministers to get cracking on reforms they have set aside despite the urgency of the delayed loans and was said to be irked by their lack of progress.

Stournaras said Greece had to reach an agreement with the Troika on the release of the next bailout tranche and next year’s fiscal gap before the beginning of the 2014. “We will find the solution,” said Stournaras. “This has to happen.”

The biggest obstacles before the Troika return, which will come around the time of a Dec. 9 meeting of Eurozone finance chiefs, are the government’s reluctance to pare down, shut down or sell off the money-bleeding defense industry EAS and finish a list of 4,000 civil servants to be fired by the end of the year.

The Parliament is due to take up the budget debate on Dec. 8 and the government holds only a slim four-vote majority. There’s anxiety among some lawmakers of the ruling New Democracy-PASOK coalition about some of the tax measures.

Stournaras said the changing size of the budget hole is only about one billion euros and he repeated Samaras’ vow that there wouldn’t be any more pay cuts, tax hikes or slashed pensions although the government is still proceeding with plans to cut the workforce by 40,000.

gr2014eulogo_300_2511Speaking on private television channel Mega, Stournaras said that the 2014 budget, which is to be voted on in Parliament on Dec. 8, just before Eurozone finance chiefs meet in Brussels for an agenda that includes talking about the long-delayed reforms in Greece and a pending one billion euro loan installment – can cover the gap.

“We have submitted a budget with a specific goal and we are submitting proposals for achieving that goal in the best possible way,” Stournaras said, adding that he was confident that envoys from the Troika are way off track with their dire predictions.

“The term fiscal gap changes from day to day. For example, we sent (the Troika) data including this October, which were much better than we and the Troika expected. We are looking for around 1 billion euros,” Stournaras added, trying to explain why there isn’t any gap and why there is, but that it’s so small it doesn’t matter.

He said despite talk earlier this fall that Greece, which is surviving on two bailouts of 240 billion euros ($325 billion) won’t need a third one, even if smaller, that there’s no need for additional loans or a third memorandum.

“We do not need a new loan because I believe that we will have the money we need under the existing program, which runs through 2016. What do we need another memorandum for? We would happily sign one if they gave us a loan with 2.5 percent interest, because we couldn’t get 2.5 percent from the markets right now,” he said.

He said that the discussion on a possible reduction of Greece’s debt will begin after the European statistics agency, Eurostat, publishes its official data on the Greek economy and on the anticipated primary surplus. “We want the discussion to start now,” Stournaras said, adding that Samaras is against a Eurogroup proposal for the issue to be put off until after EU Parliamentary elections in May.