NEWS

Government starts tough talks with troika envoys

Negotiations between the government and the troika over the next few days will not be straightforward, Finance Minister Yannis Stournaras said on Thursday after his first meeting with Greece’s lenders upon their return to Athens after a three-week break in talks.

“The negotiations for the next loan installments are still very difficult,” said Stournaras. “I can assure you that things are not simple at all.”

Sources told Kathimerini that the two sides are far apart on three key issues: the overhaul of the public sector, the merger of National Bank and Eurobank and an expected fiscal shortfall.

With regard to the public sector, the representatives of the European Commission, European Central Bank and International Monetary Fund remain unconvinced by the government’s plans to reduce civil servant numbers through a mobility scheme.

The troika is further said to be concerned by the size of the lender that would be created by a National-Eurobank merger. The inspectors also have reservations about the bank’s management.

Greece’s lenders see a fiscal gap of 3 billion euros emerging this year and next but have so far not asked for new measures. The troika is still waiting to find out exactly how Greece intends to replace the emergency property tax introduced in 2011.

The details of the property tax created a flash point between Democratic Left leader Fotis Kouvelis and Stournaras. The Finance Ministry briefed journalists late on Wednesday, saying that Kouvelis’s interpretation of what had been agreed by coalition leaders regarding the tax just moments earlier was wrong. The only difference, ministry sources said, was that the new unified tax would bring in 10 to 15 percent less in revenue than the emergency measure due to a slight reduction in charges.

The line provided by the Finance Ministry prompted an angry Kouvelis to call Stournaras to complain. Their spat forced Prime Minister Antonis Samaras to step in on Thursday in an attempt to calm things down.

Democratic Left insisted in a statement that the new tax would be progressive, have a tax-free threshold and would be applied across a wider property base. It added that taxpayers could choose to pay the levy at tax offices rather than via electricity bills.