Greek bailout review already coming up against obstacles

Greek bailout review already coming up against obstacles

Four or five major stumbling blocks look likely to weigh on the last bailout review that started on Wednesday at the Hilton hotel in Athens, according to a senior Finance Ministry official. They include delays in the selection of new general secretaries for ministries, regarding which the government received a serious warning from the creditors’ representatives at the start of the negotiations.

The creditors’ mission chiefs began their talks with the government by focusing on privatizations, and then touched on energy issues. These two areas, as well as fiscal matters, labor issues and the civil administration, are where the biggest obstacles are to be found.

The biggest problems on the privatizations front concern delays with Egnatia Odos and Athens International Airport and disagreements on the future of Public Gas Corporation (DEPA). The major subjects of the sale of 17 percent of PPC and the development of Elliniko will now be re-examined in the period after the end of the program.

The major energy issues still pending – besides the privatization of energy entities – concern power auctions and supplier charges. On the labor front, the difficulties are in arbitration and welfare benefits.

As for the fiscal matters, the adjustment of “objective values” (property rates used for tax purposes) remains outstanding, as does the adjustment of the Single Property Tax (ENFIA) that will follow if required; there is also the increase in value-added tax on the eastern Aegean islands, and the payment of all the state’s overdue arrears to suppliers and taxpayers.

The prior actions related to public administration will be discussed today, focusing on the selection of general secretaries for ministries, over which the government has come under strong criticism from the opposition. According to the bailout agreement, the selection process must be completed by next month, but this is looking rather unlikely due to delays.

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