Prime Minister Antonis Samaras and his coalition deputy Evangelos Venizelos are expected to meet in the coming days as difficult talks resume with the troika on pending reforms and with negotiations about the size of a primary surplus now on a new footing.
Both the troika and the government are keen for an agreement to be reached in the coming days so that further rescue funding can be approved in April. But a series of politically contentious issues are on the table of talks.
Low-income pensioners and members of the police and security services may get a smaller portion of a primary surplus, which is to be calculated in a different way, than originally planned. A government official indicated on Tuesday that the troika wants part of the revenue to go toward growth-boosting measures and another part to go toward paying off state debts to suppliers.
Samaras has repeatedly vowed to give 70 percent of a primary surplus for 2013, which Athens estimates at more than 1.5 billion euros, to vulnerable social groups. But the troika appears to have other plans. According to a Finance Ministry official, the sum that will be distributed will be the amount by which Greece overshoots its 2014 primary surplus target of 2.9 billion euros.
The same official rebuffed reports about a further reduction to civil servants’ salaries, noting that the troika had asked for the abolition of some benefits.
The projected size of Greece’s primary surplus, and where it will go, are among the topics to be discussed in talks with the troika. The size of a fiscal gap for 2015 will also be on the agenda along with other issues including a delayed overhaul of the civil service and the implementation of reforms aimed at boosting competition, as set out in a report by the Organization for Economic Cooperation and Development (OECD).
Greece’s reform progress was the focus of European Commission Task Force’s sixth report, which was made public on Tuesday. The report noted progress in the country’s absorption of European Union funding, noting that nearly 80 percent of funds for the 2007-13 period have been absorbed. It also expressed concern about the lack of liquidity in the Greek market while urging Greek authorities to push forward with pending reforms and make full use of the technical assistance offered to them by the Task Force.