FinMin sees progress in talks but troika extends stay

Finance Minister Yannis Stournaras sought to play down reports of a deadlock in talks with envoys representing the country’s troika of international lenders over the weekend, saying there had been “significant progress” on all issues but that negotiations would continue until the end of the month.

After briefing Prime Minister Antonis Samaras on developments on Saturday, Stournaras told reporters outside the Maximos Mansion that troika officials would remain in Athens for talks on the so-called prior actions that Greece must fulfill in order to qualify for the next tranche of rescue funding, a sum of 1 billion euros due for release next month.

Originally it had been expected that envoys from the European Commission, the European Central Bank and the International Monetary Fund would conclude their talks with the government on the weekend and leave the capital before returning later this month for a further round of discussions on the sustainability of Greece’s huge debt burden.

However, a number of outstanding issues, such as the deficit of the country’s social security funds and the efficiency of the country’s tax collection mechanism appear to have necessitated the extension of the negotiations.

Overshadowing the talks is the question of a funding gap for the next two years estimated at 11 billion euros.

Samaras, who flew to the US for a six-day official trip on Saturday, is expected to discuss the issue along with the broader problem of the sustainability of Greek debt in a meeting with IMF Managing Director Christine Lagarde over the coming days.

It is unclear exactly what stance the IMF will pursue on this issue, and on the prospect of some kind of debt relief for Greece next year. Finance Ministry sources in Athens believe the Fund will seek an agreement as soon as possible on the kind of debt relief measures that could be enforced next year, on the condition that Greece posts a primary surplus for this year. Another unknown factor is the stance that will be taken by the new German government led by Chancellor Angela Merkel opposite the Greek debt problem.

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