Stournaras and troika look for medium

Finance Minister Yannis Stournaras appeared upbeat on Wednesday after a meeting with troika officials, although the two sides have yet to reach an agreement on some 11.5 billion euros of cuts over the next two years.

?There was progress but it is still too early to say anything,? Stournaras said after leaving the talks. The European Commission representative, Matthias Mors, said the meeting had been ?constructive,? while the International Monetary Fund?s Poul Thomsen said it had been a ?good meeting.?

The troika has rejected some 2 billion euros of the cuts proposed by Athens. Sources said the inspectors appeared more open to discussion but remained opposed to proposals for cuts in military spending, municipal budgets and savings from a public sector overhaul.

There was no indication if Stournaras discussed the issue of public sector sackings or labor market reform, which the troika raised on Tuesday. The troika?s requests are thought to have included allowing employers to ask staff to work up to 78 hours a week. The inspectors also asked for the retirement age to immediately rise by two years to 67.

In a weekly bulletin on Wednesday, Alpha Bank criticized the government and the troika for their failure to reach a deal on the cuts. The lender called on the government to drop its resistance to public sector job losses.

The bank chided the troika for rejecting some of the austerity measures proposed by Athens. It said the majority of the objections were ?groundless? and pointed out that Greece is on course to beat the primary surplus target set by its lenders for this year. Alpha said the troika?s policy of rejecting the measures and making new demands was ?prolonging the recession and extremely dangerous, and largely against the interests of the country?s lenders themselves.?

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