Prime Minister Antonis Samaras and his coalition partner, PASOK leader Evangelos Venizelos, met on Wednesday to discuss Greece’s strategy in tough negotiations with the troika and are believed to have agreed on the need for the talks to be completed as soon as possible and for across-the-board cuts to be avoided at all costs.
The fact that no details leaked from the meeting at the Maximos Mansion, which came a day after talks resumed with troika envoys, was seen as indicative of the critical nature of the talks and the desire of the government to avoid provoking any misunderstandings as delicate negotiations are under way.
Despite the fact that troika mission chiefs have adopted an even lower profile than usual too, it remained clear on Wednesday that the gap between the two sides remains significant.
According to sources, the government and troika not only disagree about a projected fiscal gap for next year and the additional austerity measures this might necessitate. The fate of the loss-making state firm Hellenic Defense Systems (EAS) continues to be a point of contention, with the Greek side insisting that the company can remain “export-oriented” while the troika regards it as weak and wants it liquidated or radically downsized. Another thorny issue is the troika’s reported demand for a reduction of the social security contributions paid by Greek firms for their staff, with foreign inspectors keen to lighten the burden on the firms but the government fearing the impact of such a move on cash-strapped social security funds.
The Labor Ministry has reportedly made a counterproposal to the troika, suggesting that firms with outstanding debts to social security funds be allowed to pay them off in a larger number of installments. The aim is to offer a “realistic” plan to bring money into the funds and to stop more companies and self-employed professionals from going out of business, sources said.
Samaras and Venizelos are also believed to have discussed the draft plan for a unified property tax which has prompted vehement protests by MPs from both parties in the coalition as it foresees a greater burden on city properties and a tax on farmland. Talks between Finance Minister Yannis Stournaras and a group of MPs from PASOK on Wednesday about the draft tax bill reportedly failed to yield any common ground.