Troika leaves without final deal on cuts

Envoys representing Greece?s international creditors, the troika of the European Commission, European Central Bank and International Monetary Fund, were to leave Athens on Saturday for a ?brief pause? after negotiations with government officials fell short of a final agreement on the composition of an 11.5-billion-euro austerity package.

But despite failing to reach a consensus on Friday, both sides issued positive messages on the progress in talks with sources telling Kathimerini that a batch of countermeasures proposed by Finance Minister Yannis Stournaras in a bid to avert deeper cuts to pensions and salaries had been accepted in principle by the troika with a caveat — that failure to enforce them would result in the imposition of more onerous cuts.

According to a high-ranking official of the ministry, the two sides agreed on 9.5 billion euros? worth of measures — involving cuts to pensions, salaries and state funding — and reached a compromise on how the 2-billion-euro gap would be filled.

Troika officials accepted Stournaras?s proposal for the savings to come from cutbacks to the defense and health sectors, and to local authority funding and public administration costs, sources said. But the foreign envoys are said to have demanded more practical details about the proposed countermeasures and to have said that authorities would be obliged to impose a new raft of harsh cuts if the softer measures failed to bear fruit by January 2014. ?We agreed on quite a few of the measures,? a ministry source said, adding that ?other areas must be explored and clarified.? He added that the government was set on ?protecting the weaker members of society.?

Meanwhile, speaking to reporters during an official visit to Rome, Prime Minister Antonis Samaras denied reports that the new austerity package would include a tax on property owners who rent out their assets.

The troika, for their part, issued a written statement, saying that there had been ?good progress? and that they would ?take a brief pause? before returning ?soon? — probably next week.

A report on Friday by Reuters quoting unnamed European officials as saying that the troika?s review on Greece?s progress would not be issued until after the US elections, scheduled for November 6, was swiftly denied by EC official Matthias Mors. But the fresh delay in efforts by Greek officials and the troika to seek a common line on the austerity package suggested that an agreement will take longer than expected, meaning that talks between Samaras and his restive coalition partners, expected in the middle of next week, will also be put back back, as will a vote in Parliament on the cuts. This is likely to delay the release of the troika?s report, which will determine whether Greece receives a 31.5-billion-euro loan on which its solvency relies.

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