Troika talks resume in Athens but differences remain

The government resumed talks on Wednesday with troika envoys on a series of unresolved matters including the overhaul of state defense firm EAS, the final obstacle to the release of a 1-billion-euro tranche of rescue funding, but little progress was reported in bridging the gap between the two sides.

Finance Minister Yannis Stournaras and Development Minister Costis Hatzidakis both met the envoys, discussing the outlook for EAS as well as the thorny issues regarding restrictions on home foreclosures, which the troika wants lifted, and a reduced value-added tax of 13 percent on restaurants and other food services, which foreign auditors want returned to the original higher rate of 23 percent. Sources suggested that the troika had yielded slightly on the matter of foreclosures. But the government has not ruled out the possibility of acting unilaterally on both issues if they fail to reach a compromise with foreign auditors, according to sources. The likeliest scenario is that two bills will be drafted – one extending restrictions on home foreclosures into next year and the other extending the trial 13 percent VAT rate for restaurants – and attached to a contentious property tax bill. That bill is to be submitted to Parliament in the coming days ahead of a debate, which is expected to be vehement as several coalition MPs oppose the measure, and must go to a vote before Parliament closes on December 20.

Troika officials also have their doubts about the property tax bill, contesting the government’s forecast that it will bring 2.6 billion euros in revenue and calculating that the revenue will fall some 400 million euros short of target.

The government is keen to bridge its differences of opinion with the troika, sources told Kathimerini, but is also determined to maintain certain “red lines” set out by Prime Minister Antonis Samaras and his coalition partner Evangelos Venizelos, who met on Wednesday to discuss the agenda of talks with the troika.

Samaras also met with visiting Lithuanian President Dalia Grybauskaite for talks that focused on the handover of the EU’s rotating presidency from Vilnius to Athens on January 1. Grybauskaite congratulated Samaras on progress in economic reforms and said she expected to see growth return to Greece next year. Samaras said Greece’s EU presidency would focus on boosting growth, regulating illegal immigration and promoting energy exploration.

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