The Greeks heading to Paris next week for a series of meetings with the country’s creditor representatives will have a loaded agenda. Led by five ministers, the mission’s objective is to smooth the way for the troika’s next inspection.
The outcome of the three days of talks starting Tuesday remains unpredictable. The troika has made it clear it does not intend to adopt any positions, but instead plans to hear out the Greek mission and then process the information ahead of the negotiations in late September.
The Finance Ministry will be focusing on the budget’s progress in 2014 and the 2015 fiscal gap. The troika estimates the gap at 2 billion euros, while the Greek side puts it much lower, at 900 million. However, certain changes are likely to occur that will affect these estimates, one being the government’s intention to soften the impact of certain taxes, including the special consumption tax on fuel and the ENFIA property tax. The revisions here will widen the fiscal gap. The troika has not raised objections but it does expect countermeasures.
The issues concerning the Labor Ministry, which are both significant and numerous, include a re-examination of regulations on mass job cuts, union group rights, the finances of the country’s social security system and revision proposals, as well as changes to welfare payments. The government will seek to postpone any moves on these matters until future talks have taken place. The junior coalition partner, PASOK, has made it clear it will not accept troika demands on labor issues.
As for the Administrative Reform Ministry, civil service job cuts and the sector’s new unified pay structure will be at the forefront of the talks. If the job cuts objective for 2014, set at 15,000, is to be achieved, a further 6,500 civil servants will need to go.
The mountain of nonperforming bank loans and revisions to foreclosure procedures for real estate as a result of tax debts are the core issues being dealt with at the Development Ministry, as well as the Justice Ministry. Earlier this week, the government underlined its intention to reject troika demands for foreclosure auctions beginning at one-third of properties’ nominal values.