Government to leverage surplus for debt relief

With the date that troika officials are to return to Athens still unclear, the government is believed to be focusing on exploiting the leverage afforded by a larger-than-expected primary surplus to push its goal of launching negotiations on debt relief.

As foreign auditors await further progress by Athens on a series of economic reform commitments, and with differences of opinion within the troika about how Greece should cover its funding needs, it is unlikely inspectors will return to Athens before a Eurogroup summit on February 17, Kathimerini understands.

But, according to sources, the Greek government is less concerned about a possible delay in the troika’s return and is anticipating some kind of “gift” from Germany, the European Union’s paymaster, in return for its achievement of a large primary surplus. Sources indicate this “gift” could be the launch of talks on debt relief in April, a month before crucial local and European Parliament elections. If debt talks do begin in April, this could give Prime Minister Antonis Samaras an edge over leftist SYRIZA leader Alexis Tsipras, whose party rejects the terms of the country’s foreign loan agreements but is leading in opinion polls. In statements to reporters in Rome at the end of last week, Tsipras said Greece’s debt must be reduced by at least 60 percent to become sustainable.

While Samaras and Finance Minister Yannis Stournaras push for talks on debt relief privately, their public statements have focused more on Greece’s primary surplus, which is expected to exceed 1.5 billion euros.

Meanwhile the country’s troika of foreign lenders wants to see progress on a range of reforms, including the removal of barriers to competition and a streamlining of the civil service.

In a related development, Stournaras told the Frankfurter Allgemeine Zeitung that Greece’s funding gap for 2014 is around 5 billion euros or 11 billion euros for the next two years. He added that Greece did not need a third rescue package.