Greek coalition partners set out ‘red lines’ ahead of troika inspection

A policy blueprint being drawn up between New Democracy and PASOK sets out a joint stance by the two coalition parties ahead of the anticipated return to Athens by troika officials who are expected to press for further budget cuts, Kathimerini understands.

Meanwhile troika sources in Brussels have rebuffed reports that Greece’s creditors are planning to press for “additional horizontal cuts” but have also questioned the government’s ambitious target for a primary surplus next year, suggesting that the draft budget for 2014 be revised.

The agreement that ND and PASOK officials have been working on for the past two weeks is expected to get the final approval of Prime Minister Antonis Samaras and PASOK leader Evangelos Venizelos when the two men meet on Wednesday in a bid to set out Greece’s “red lines” ahead of what are expected to be very tough talks with representatives of Greece’s foreign creditors – the European Commission, European Central Bank and International Monetary Fund.

According to sources, the blueprint stresses that further “horizontal” cuts to salaries and pensions cannot be imposed on a public reeling from more than three years of austerity. Samaras and Venizelos have made several statements to that effect in recent days in response to reports that troika envoys want another 2 billion euros in cuts and to the ECB’s refusal to discuss the option of rolling over Greek bonds to cover a financing gap next year.

The government is also expected to insist that the creditors offer debt relief, in accordance with a Eurogroup agreement which says talks on relief could be held if Greece posts a primary surplus this year, which it is on track to do.

The blueprint also calls for action to “disengage” from the memorandum – as the country’s deal with creditors is known – and sets as a goal Greece’s “fiscal self-sufficiency” as well as political stability, according to sources. The potential for revising the Constitution in favor of a more proportionally representative system with the aim of averting political polarization is also mentioned, sources said.

Meanwhile troika sources in Brussels told Kathimerini that creditors were not pushing for “additional horizontal interventions” and only wanted Greece to honor “targets that have been already agreed.” The sources also questioned Greece’s forecast for a 2.8-billion-euro primary surplus next year, saying the 2014 growth forecast was not adequate to sustain the projected increase in revenues, and called for a revision of the draft budget.