Rift between troika and government remains unbridged

Talks continued between government and troika officials on Tuesday but the rift between the two sides remained wide and it appeared inevitable that the draft budget for 2014 will be submitted in Parliament on Thursday with no agreement as foreign envoys leave Athens for a Eurogroup summit scheduled to start in Brussels on Friday.

A senior Finance Ministry official said on Tuesday that the odds of an agreement with the troika being reached were “50-50” but sources insisted that the difference separating the two sides was significant, with government officials emphasizing that any attempt to push further austerity measures through Parliament would shake the coalition, which has a majority of just four seats.

The pressure comes amid growing political and social tensions with protracted strike action in the higher education sector and a looming walkout by health workers.

The likeliest scenario, sources said, is that the budget will be submitted to Parliament complete with the 1.3 billion euros in projected revenue from “structural reforms” – chiefly from a crackdown on social security and tax evasion – which the troika has questioned. It remained unclear when the ministry would submit a draft bill for a new unified property tax that has been revised following objections by deputies from both parties in the coalition to some of its provisions.

Finance Minister Yannis Stournaras is to meet again with troika envoys at noon on

Wednesday after scheduled talks between the foreign inspectors and Administrative Reform Minister Kyriakos Mitsotakis, who is overseeing an overhaul of the civil service, at 9.30 a.m. Both ministers have sought to appear upbeat about the prospects for a deal but it appeared doubtful that an agreement would be reached in time for a Eurogroup summit on December 9. This means that the next tranche of rescue funding for Greece, a sum of 1 billion euros, may not be disbursed this year. The state coffers have adequate reserves to keep the country afloat until early next year, as was established during a visit on Tuesday to the General Accounting Office by members of the troika’s technical team, according to sources.

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