Government to shift focus back to troika talks
Government officials hope to press on with tough negotiations with troika envoys in a bid to secure further crucial rescue funding after a vote of no confidence in Parliament set for Sunday.
The aim of the government is to complete talks with foreign envoys on the “prior actions” necessary for the release of the next tranche of rescue funding – a sum of 1 billion euros – before a scheduled summit of eurozone finance ministers on Thursday.
The key outstanding issues include an overhaul of the civil service – including the induction of thousands of public sector employees into a scheme of forced transfers and layoffs – and the restructuring of the Hellenic Defense Systems (EAS). The two sides must also resolve a dispute regarding the size of Greece’s fiscal gap for next year.
Athens insists that it is no more than 700 million euros while the troika puts its above 2 billion euros, which has fuelled fears about demands for new across-the-board cuts to salaries and pensions. Greek officials have insisted that such “horizontal cuts” are out of the question and have suggested that adequate revenue could be raised from a more efficient crackdown on evasion of tax and social security contributions.
Another tough task the government must complete as part of its commitments to foreign creditors is the drafting of a new “unified” property tax which combines several levies including one that is currently collected via homeowners’ electricity bills. The first draft angered many coalition MPs as it outlined an increase of taxes on city properties as well as a tax on farmland. According to sources, officials hope to submit a new revised draft this week or by next week at the latest. The final budget for 2014 is to be submitted in Parliament on November 21 and government officials hope to have overcome any serious differences with the troika before then.
Alternate Finance Minister Christos Staikouras sought to strike an upbeat tone in a speech in Parliament on Saturday, predicting that Greece would return to the international bond markets in 2014.
Staikouras emphasized that Greece, which is on target to post a primary surplus for this year, would seek a reduction to its debt burden which remains unsustainable. “We will seek from our partners their active support for lightening the Greek debt and our desire is for this to happen as soon as possible and subject to clear terms,” he said.
Staikouras was addressing Parliament on the second day of a debate on a censure motion brought by leftist SYRIZA against the government, a move which he said was indicative of the main leftist opposition’s “identity crisis.”
SYRIZA submitted the censure motion last Thursday, after a police raid on the occupied headquarters of ERT last Thursday, claiming that Samaras’s coalition was “denigrating” democracy and lacked a popular mandate for its austerity policies.