ECONOMY

Troika set to return as haircut talks get ‘complicated’

Representatives of Greece?s international creditors – the European Union, the European Central Bank and the International Monetary Fund, known as the troika – are returning to Athens next week to start negotiations with the government. These talks will focus primarily on the implementation of the October decision by the eurozone summit for the private sector involvement plan (PSI+) as well as the new loan contract, with the IMF set to consider its sixth tranche of loans to Greece on Monday.

The government is already locked in negotiations with representatives of the private sector bondholders over the 50 percent haircut on privately held Greek debt.

Speaking in Parliament on Friday, Prime Minister Lucas Papademos branded the talks ?complicated,? while the head of the Institute of International Finance, Charles Dallara, warned that discussions on PSI+ may now go into 2012.

?Negotiations between Greece and representatives of credit institutions are unfolding. Each side has its strategies and has starting positions,? commented Papademos, who yesterday met Bank of Greece Governor Giorgos Provopoulos to discuss the legislative moves needed for the implementation of PSI+.

Late on Thursday, Dallara said, ?I would not say that progress has been dramatic,? adding that while the aim is for talks to conclude within 2011, they may continue into the new year.

Preparations for the troika visit will begin on Monday or Tuesday with the arrival of low-level technical staff, followed by the representatives themselves on December 12. They are set to stay until December 18 and examine the possible need for new measures for 2012-14 as well as laying the groundwork for their next visit (on January 9 or 16).

The IMF signaled late on Thursday that its next loan installment for Greece, amounting to 2.2 billion euros, could be released next week.

IMF spokesman Gerry Rice told a news conference that the Fund?s executive board would meet on Monday to discuss the aid to Athens.