Greece Regroups Over Reforms

Greek Prime Minister Antonis Samaras (R) with Troika envoys

ATHENS – Coming off vacation, Greek ministers will meet this week to take up work again on long-stalled reforms demanded by international lenders.

Greece needs to act on the undone work before officials meet in Paris early next week with envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB). The meeting was moved from Athens to avoid protesters.

The Paris talks are expected to focus on Greece’s progress in overhauling its economy and Prime Minister Antonis Samaras’ hopes to restructure the 240 billion euros ($327 billion) Greece owes the Troika.

He wants new terms, including a longer time to repay and a lower rate of interest and possibly a debt cut, which would force taxpayers in the other 17 Eurozone countries to pick up the tab for generations of wild overspending by his New Democracy Conservatives and their coalition partner, the PASOK Socialists.

Despite two bailouts and stiffing private investors with 74 percent losses to write down what it owes, Greece’s debt is still 174 percent of Gross Domestic Product (GDP) and isn’t falling, despite what Samaras said is a burgeoning recovery.

With his party’s popularity fading behind the anti-austerity major opposition Coalition of the Radical Left (SYRIZA), Samaras is looking for tax breaks to offset the tough measures he imposed on Troika orders.

If the outcome of the negotiations in Paris is positive, Samaras hopes to present the proposed tax relief during his speech at the Thessaloniki International Fair (TIF), where premiers traditionally set out economic policy or offer pre-election handouts. This year, TIF is scheduled to run from Sept. 6-14.

The government also wants to allow Greeks with debts to the state to have more time to pay, which the Troika didn’t want, fearing it would slow critical revenue intake.

Before that can happen, the government must meet a scheduled of some 600 unfinished reforms as part of a revised memorandum with the Troika. It also includes an overhaul of civil servants’ salaries and a second phase of pension reform.

Another top priority for the government is to untangle the confusion caused by the proposal for a new unified property tax (ENFIA), which prompted an outcry after erroneous data used to calculate it resulted in wrong and huge bills.

Among those objecting to the ENFIA were a large number of coalition MPs, many of whom called for the levy to be revoked but who have barked before over some reforms and then relented after squeezed by party leaders.

The issue is expected to dominate the political agenda over the coming days as the first installment of the contentious tax is due to be imposed next month even though the bills are wrong.