PM faces tough talks on two fronts as troika returns

Prime Minister Antonis Samaras faces tough negotiations on two fronts this week as troika mission chiefs return to Athens on Monday for a new audit as his coalition partners press for changes within the shaky administration.

Meanwhile Samaras will have the chance to catch up with Luxembourg Prime Minister and former Eurogroup chief Jean-Claude Juncker who is also due in Athens on Monday for a two-day visit. Juncker, who described Samaras as “a brother” in comments to the German Stock Exchange’s news website last week, and hailed the Greek premier for doing an “excellent job” with reforms, condemned the European Commission for its forecasts on the Greek crisis over the weekend, noting that they had “no link with reality.”

His comments came amid speculation fueled by an International Monetary Fund report admitting to serious errors in Greece’s first foreign bailout, signed in 2010 by then Prime Minister George Papandreou.

In comments to Skai over the weekend, Greece’s former representative to the IMF, Panayiotis Roumeliotis, blamed Papandreou’s administration for failing to demand a haircut on Greece’s huge debt from the outset. “The Europeans were unbelievably slow in taking decisions but we did not rise to the occasion either; we did not seek a reduction of Greece’s debt,” he said.

According to sources in Athens and Brussels alike, the IMF’s report is less of a “mea culpa” than an attempt to put pressure on eurozone leaders to accept a haircut on loans to Greece.

The prospects for a haircut are not officially on the agenda of talks between Finance Minister Yannis Stournaras and troika envoys. The talks are expected to focus on progress in reform efforts – chiefly the streamlining of the civil service and an overhaul of the tax system – as well as an anticipated funding gap of 4.6 billion euros for 2014 and what measures will be taken to plug it.

Alongside the troika talks, Samaras is expected to meet with his coalition partners who are likely to press for changes to the administration’s policy program. The prospects for a reshuffle are likely to be discussed, though Samaras is reportedly keen to put off changes until the fall as ministers still have reforms to push through.