ECONOMY

Troika to focus on 5 main points

As Greece is due to receive the balance of the second installment of financial aid from its international lenders today, their representatives are back in Athens to examine the course of the country’s fiscal streamlining. The government announced yesterday that it had received 6.5 billion euros and is due to receive another 2.5 billion today from the sum of 110 billion granted by the eurozone countries, European Central Bank and International Monetary Fund, collectively known as the troika. On the day that EU Economic and Monetary Affairs Commissioner Olli Rehn stated that Greece «must remain focused on its fiscal adjustment and reforms,» inspectors from the European Commission, the ECB and IMF began their eight- or nine-day visit to coincide with the drafting of the 2011 budget. The troika will have meetings with various financial agencies in Athens and focus on five points in particular. The first is the new budget that is being drafted. The first draft will be tabled in Parliament on October 4 and the representatives of Greece’s lenders wish to ensure that if a measure is to be withdrawn, it will be swiftly replaced by another so that there is no danger of missing the target of reducing the budget deficit for 2011. On the expenses side, for the first time a ceiling on spending will be set for each ministry, which will require precise accounting in order for each department to avoid additional expenditures. The progression of this year’s budget is the second focus point for the envoys, as they have noted the lag in the collection of revenues. The Finance Ministry is preparing certain adjustments to amend this, and Greece’s lenders wish to make sure the problem does not spiral out of control. The troika is also concerned about the finances of peripheral state sectors such as hospitals, local authorities and social security funds. The Finance Ministry is supposed to have a better picture of the situation regarding these institutions by September 20. Another focal point is banks, with the troika planning to examine developments in the credit sector. Discussion is likely to center on last week’s report by the state’s consultants that includes all likely scenarios for the future of Greece’s banking system. Finally, the envoys intend to meet with the new development minister to discuss how the economy is going to emerge from recession, with various development issues on the table and the implementation of the EU-funded National Strategic Reference Framework.