NEWS

Greece locked in loan talks

A conference call between Finance Minister Evangelos Venizelos and officials from the European Commission, the European Central Bank and the International Monetary Fund ended inconclusively on Monday night but talks are due to continue on Tuesday, as the troika presses Greece to take more measures to improve its public finances.

The Finance Ministry said the discussion had been ?productive and substantive? and that technical experts would today examine some data ahead of a new teleconference on Tuesday evening.

The conversation focused on the steps the government has to take before the troika approves the sixth tranche of Greece?s bailout. Without the 8-billion-euro installment, Athens will run out of money by the middle of October.

Sources said that the troika is pushing for a range of new measures and for public sector reforms to be speeded up. Among the steps to be taken by the government is the equalization of tax on heating fuel and gasoline, which means that the cost of the former will rise by 40 cents per liter.

The property values set for tax purposes are due to rise, which means that the cost of all real estate taxes, including the emergency levy announced last week, will rise from next year.

In terms of public spending, top-range pensions are likely to be limited to between 1,500 and 1,800 euros per month. However, this is unlikely to have a discernible impact as these pensions only make up 3 percent of the total, which means that an across-the-board reduction to pensions may have to be applied.

Athens is also under pressure to reduce civil servants? pay, which could lead to cuts of about 50 percent. There was also speculation that the government has been asked to speed up the process of placing public sector workers on labor reserve and to increase to 150,000 the number of civil servants that will be included in this program, which will involve them receiving reduced wages for several years before being sacked.

?If you can do [the staff cuts] up front, you get over it much more quickly,? IMF representative Bob Traa told The Associated Press. ?Our experience is that? if you do things gradually, that may induce the public getting very tired.?

Traa also called for a more efficient tax collection system as a way of the government avoiding increasing taxation in the future. ?In our view, you should not be drawn to higher and higher taxes on the limited tax base,? he said. ?This will neither be economically nor politically sustainable.?