Troika returns, with lots on agenda

European officials meeting in Brussels on Monday hailed Greece’s progress in economic reforms but emphasized that more remains to be done to secure the release of continued rescue funding which is to be the key focus when talks with troika officials resume on Tuesday.

Eurogroup chairman Jeroen Djisselbloem confirmed Monday that troika envoys would fly back to Athens Tuesday, following confusion over the weekend about the timing of their return, and said Greece had been “working constructively with the troika” but that “further progress is still needed.”

Addressing a press conference after a summit of eurozone finance ministers, Djisselbloem said he hoped the preconditions would be fulfilled for the release of the next tranche of rescue funding to Greece, a sum of 1 billion euros, but said it would be “very, very hard if not impossible” for the troika’s review to be finalized by the end of the month.

Earlier German Finance Minister Wolfgang Schaeuble struck a similar tone, noting that Greece was “on a good track overall” but that “many issues remained open” with the troika. Arriving at the summit, Greek Finance Minister Yannis Stournaras insisted that Greece has “done a lot” and was “looking forward to the completion of the review.”

Talks between the troika and Greek government officials are to resume Tuesday with two key goals: firstly to reach an agreement on the fate of state defense firm EAS, which must be finalized before the creditors can sign off on further rescue aid; and secondly to discuss two politically sensitive issues on which Athens has threatened to act unilaterally – restrictions on home foreclosures and the value-added tax on restaurants and other food services. As regards EAS, Athens has made a proposal to radically downsize the firm for a trial period of a year while continuing with exports. The government is also seeking a gradual lifting of restrictions on foreclosures – rather than revocation of the ban – and wants to extend the enforcement of VAT on restaurants at the lower rate of 13 percent, which was introduced in the summer as a trial.

The troika is keen to lift the foreclosures ban to inject liquidity into the housing market and is reluctant to allow Greece to continue with a 13 percent VAT on restaurants, claiming the measure failed to yield the anticipated revenue.

An internal troika e-mail – sent from the International Monetary Fund to the European Commission and European Central Bank and revealed by Kathimerini – suggests Greece has made very little progress in reforms.

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