Greece appears closer to deal with troika after extended talks

Finance Ministry sources have suggested that the coalition could conclude its negotiations with the troika over a new package of cuts as early as today after Finance Minister Yannis Stournaras held extended talks with representatives of Greece?s lenders into early Friday morning.

The negotiations ended at about 1.30 a.m. and the Finance Ministry sources appeared optimistic that the measures could be finalized, pending coalition leaders? approval, by the end of the day.

Sources added that the troika backed down over further demands for cuts to salaries, pensions and benefits. Stournaras is said to have told the officials from the European Central Bank, European Commission and International Monetary Fund that he would rather resign than approve these further reductions.

So far, the two sides have agreed on 7.5 billion euros of cuts to wages, pensions and benefits (some 1 billion will come from raising the retirement aged to 67) and 1.5 billion euros of savings from reform of the public sector. Another 2 billion euros is to be found through raising tax revenues.

Stournaras is due to meet the troika again at 4 p.m. on Friday. Troika officials are expected to leave Athens next week and return before the Eurogroup meeting on October 8.

If an agreement is reached this week, coalition leaders will have to give their approval when they meet next week after their talks on Thursday proved inconclusive.