Troika completes meeting with Stournaras, set for talks with PM

Representatives from the European Commission, the European Central Bank and the International Monetary Fund completed talks with Finance Minister Yannis Stournaras on Monday afternoon and are due to meet Prime Minister Antonis Samaras at 6 p.m.

The troika officials refused to comment after the meeting, during which they dicussed the 13.5-billion-euro austerity package that the two sides are trying to agree on.

Sources suggested that the troika has reservations about roughly 2 billion euros of the measures proposed by the Greek side.

Greece has put forward a package of about 10.5 billion euros in spending cuts and another 3 billion euros in tax hikes.

Stournaras was due to present the draft budget for 2013 shortly after his meeting with the troika.

Government officials told Reuters Greece will aim for a primary surplus before debt servicing of 1.1 percent of GDP next year, from a 1.5 percent deficit in 2012, the first positive balance since 2002. But the economy will continue to shrink for a sixth year in 2013 by 3.8 to 4 percent.

Greece’s economic output will have declined by a quarter since 2008 in a vicious spiral of austerity and recession.

Analysts said even the recession scenario set out in the budget appeared optimistic, given Greece’s slow reform efforts and a weakening euro zone economy.

“Chances are the budget targets will be missed because of the deeper recession which the cuts will bring and the inability to meet privatisation targets,» said Xenofon Damalas, head of investment services at Marfin Egnatia Bank.

Troika officials were jeered by dozens of supporters of the right-wing Independent Greeks party waving Greek flags and shouting «out with the troika» as they entered the finance ministry on Monday.

Belt-tightening has taken a toll on economic activity, suppressing domestic demand and driving the jobless rate to a record of almost 25 percent.

This year’s primary deficit – which excludes debt servicing costs – is expected to exceed a targeted 1.0 percent of GDP. The finance ministry sees the primary deficit at 1.5 percent of national output in 2012.


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