Greece has to find another 2 bln euros in early 2012

If Greece thought it had done enough to satisfy the European Commission, the European Central Bank and the International Monetary Fund – collectively known as the troika – with the measures it set out in its 2012 budget, it appears it was mistaken as the country?s lenders are demanding that the government find a way to raise or save another 2 billion euros.

Sources told Sunday?s Kathimerini that following a visit to Athens last week, troika officials informed the government that it would have to come up with 2 billion euros worth of measures by next month, when the inspectors are due back in Greece.

It appears that the troika wants these extra measures to be implemented in the first three months of 2012 and to be included in any agreement between Greece and its lenders for a second bailout. The government is currently negotiating a loan package for 130 billion euros.

The budget for 2012, which Parliament approved earlier this month, foresees some 5 billion euros in spending cuts and another 3.6 billion in tax collection. The chief aim is to report a primary budget surplus of 1.1 percent of gross domestic product next year.

Sources said that the troika has not stipulated where the extra 2 billion euros should come from but wants greater emphasis to be placed on speedier structural reforms. Greece?s lenders also indicated that they would accept measures for 2013 and 2014 being finalized in June, when any new loan agreement is due to be signed.

Finance Minister Evangelos Venizelos suggested to the troika that if the three parties in the interim administration could not agree on the new measures, then the next government would decide them. The ECB, EC and IMF representatives rejected this proposal because Athens and the troika will have to reach a preliminary agreement by March so Greece can receive the first instalment of its new bailout, which will be 90 billion euros. Most of this money will go toward bond maturities.

This appears to leave Greece with little option other than for the current coalition to negotiate the new measures with the troika or for snap elections to be held in January so the new government could conclude the talks with the troika.

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