Troika and the Government lay their cards on the table, in light of the continuation of negotiations in Athens
The round of negotiations in Paris, between the Greek authorities and representatives of the creditors, was completed on Thursday, 04 September. The three-day meetings between the two parties were characterised as “preliminary” contacts, in order to accelerate the agreement during the full assessment bound to begin later this month in Athens.
“The discussions we held over the past three days with Mr. Hardouvelis and his team turned out to be useful and constructive in identifying issues within the framework of the Greek programme, whereas we hope to continue discussions in Athens as part of our regular monitoring”, said Mr. Declan Costello, head of the European Commission’s delegation in the troika, after the completion of the negotiation.
On the Greek part, Finance Minister Gikas Hardouvelis appeared optimistic and stated, upon his departure from the eleven-hour meeting of Wednesday: “We are optimistic, we want to increase our credibility, we want to show that the programme is on track, both financially and structurally”, adding that: “We were not on holidays, but rather worked hard throughout August and, as a result, we are punctual with respect to the deadlines”.
In general, the two parties seemingly opened their cards with due caution, hoping for a mild outcome in the coming negotiations and avoiding the delays of the previous year, when a whole eleven months were needed for an agreement to be reached and the agreed funds to be disbursed. However, in the private meetings of ministers with the creditors’ representatives, very specific issues were raised, such as tax cuts, “red loans” and labour issues, although inconclusively as neither of the two parties was willing to go into details on exact discussions.
As far as tax cuts are concerned, a senior government source mentioned that “the Greek side put the issue on the table, of course”, but nevertheless was unable to disclose the answer. “We raised all issues but I am unable to tell you what the results were; some were easier and clearer, whereas others were more difficult or something in-between. There was symmetry to the debate”. The official added that, “tax cuts are to be examined in the framework of the budget. Our creditors are fully aware of the difficulties experienced by the people, as well as of the fact that they are seeking hope”.
When asked about the issue of extending overdue loans, the response of a government member was similar and avoided to communicate the creditors’ position. “Red loans” were characterised as a “focal” issue, upon which the restoration of liquidity to viable businesses will depend. “There was a long discussion that went really well and I believe that we demonstrated to our creditors that this is our own problem, which we want to deal with”, the government source pointed out.
Regarding labour issues, the same source mentioned that this is a highly sensitive issue, given that new studies are expected to be published by the International Labour Organisation (ILO), which are bound to influence the behavior of the creditors. In relation to the issue of ENFIA, the source said that “our goal is € 3,2 bn. and any changes shall be in line with this goal”.
Concerning the debate on debt, the government source merely replied that “the issue shall be brought up at some point”.
The Greek authorities did not hide their optimism about the outcome of the regular monitoring, despite the fact that the range of 542 actions that should have been completed by the end of August were only partially authorised. “We believe there is more we have done, but they have not yet been able to certify this ascertainment. We want to have reached a high percentage by the time they return to Athens”, a top government official summarised.