Troika return to Athens may be delayed despite pressure from Rehn, Lagarde

Ongoing efforts to bridge a gap between government and troika officials on the size of a projected fiscal hole for next year and on reforms Greece must implement to secure continued rescue funding are moving very slowly, Kathimerini understands, meaning that a deal is unlikely to be reached before a Eurogroup summit on December 9 and the anticipated return of foreign envoys might be delayed.

It had been expected that troika officials would return to Athens next Monday but their trip might be put off for a week due to the lack of progress in talks, sources said. If a deal is not reached by December 9, it is likely the two sides will aim for a solution before a European Union leaders’ summit on December 19 and 20.

Sources said that European Economic and Monetary Affairs Commissioner Olli Rehn and International Monetary Fund managing director Christine Lagarde had both called Athens this week to urge the government to conclude its talks with the troika quickly.

A series of thorny issues must be resolved for this to happen. The first key obstacle is a budget gap for 2014 which is now estimated at 1.2 billion euros after Greek and troika officials compromised on their original estimates. Athens has proposed measures to cover this gap and, according to sources, the troika has yet to evaluate measures accounting for half the sum.

The government must also plug an additional funding gap which has been created by the revised version of a unified property tax and is estimated at 400 million euros. Half of this is to come from Greece’s Public Investment Program and the rest from unspecified structural reforms.

The bill outlining the new property tax is to go to Parliament next week ahead of a scheduled vote on the budget for 2014 on December 7.

Athens must also make good on so-called prior actions necessary to secure the next aid tranche of 1 billion euros. The key stumbling block here is the overhaul of the state defense firm, EAS. A Greek proposal, which foresees a downsized firm continuing to operate with an exports-oriented focus for at least a year, was presented at yesterday’s Euro Working Group.

Two other contentious issues – which are not among the prior actions – include troika demands for the lifting of restrictions on foreclosures and collective dismissals in the private sector.

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