ECONOMY

As troika returns to Athens, EU rejects claims Greek 2014 fiscal gap is 2.9 bln

A European Commission official has denied reports in Greece that the troika only agreed to return to Greece after Athens agreed that next year’s fiscal gap would be as big as 2.9 billion euros.

Troika inspectors began arriving in Athens on Monday and representatives of the Commission, the European Central Bank and the International Monetary Fund are due to visit the General State Accounting Office, Finance Minister Yannis Stournaras and Labor Minister Yiannis Vroutsis on Tuesday.

However, a spokesman for European Economic and Monetary Affairs Commissioner Olli Rehn denied that the troika believes Greece’s fiscal gap will be as big as 2.9 billion euros next year

“I don’t recognize that number,” said Simon O’Connor in a response to question from Kathimerini’s Brussels correspondent Nikos Chrysoloras.

“Beyond that, the discussions on this very subject are now getting under way. We are now in discussions in Athens with our interlocutors and we’ll see where that goes.”

Greece believes its fiscal shortfall for 2014 will be no bigger than 500 million euros but the troika is thought to see the figure being between 2 and 2.5 billion euros.

Sources told Kathimerini that the three key arguments that Greece will use to defend its position are that tax revenues have beaten their targets this year, that the economy will contract by less than had been forecast and that the unified wage structure will be applied strictly across the public sector, including state companies, thereby generating at least 500 million euros in savings.

O’Connor confirmed that the European Commission waited until late on Friday information to receive some feedback from Athens that would allow “productive discussions” to take place and the review to resume.

“This was information largely related to fiscal issues but also to some other issue of the program conditionality, which is being discussed in the context of the ongoing review,” he said.

Speaking to Sunday’s Kathimerini, Stournaras appear hopeful that Greece could reach an agreement with the troika on its latest reforms and next year’s fiscal gap.

“There are solutions for all the matters, as long as there is realism, flexibility and common sense on all sides,” Stournaras told Kathimerini ahead of the troika’s return.

“We all have to be calm,” he said. “Our lenders have to pay close attention to the fact that the Greek economy is turning around, which the markets have already recognized.”