Stournaras set to face questions on competition rules and fiscal gap at Eurogroup
Greek Finance Minister Yannis Stournaras is expected to inform his eurozone counterparts on Monday that the government plans to implement the vast majority of recommendations made by the Organization for Economic Cooperatioon and Development to remove barriers to competition.
Stournaras is likely to come under pressure at the Eurogroup meeting as the current review of Greece’s adjustment program remains open. Greece’s lenders last week made it known that they want Athens to adopt the OECD’s proposals before the review can be completed.
After an 11-month study, the OECD identified in November 555 regulatory restrictions which it says undermine competition. The Paris-based organization made 329 recommendations on legal provisions that should be amended or repealed.
The OECD estimates the benefit to the Greek economy would be around 5.2 billion euros, or roughly 2.5 percent of gross domestic product, as a result of “increased purchasing power for consumers and efficiency gains for companies.”
The government is likely to agree to adopt around 80 percent of the OECD’s proposals.
However, there are also two key fiscal issues that remain unresolved. One concerns the fiscal gap for 2014 and whether a Council of State ruling reversing wage cuts in the armed forces and emergency services means that the government has to adopt new measures this year.
Then, there is the matter of the fiscal gap for 2015. The government estimates this to be around 1 billion euros, whereas the troika believes it will be two to three times this figure.
Troika officials are expected to return to Athens towards the end of this week or the beginning of next week. The aim is to achieve a staff level agreement in time for the Eurogroup which is due to take place on February 17.
