Finance Minister Gikas Hardouvelis met with Deputy Prime Minister Evangelos Venizelos on Wednesday to discuss the gridlock in negotiations with Greece’s troika of international creditors from the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF). The troika were due for meetings in Greece after results of the European bank stress tests last month however are reluctant to come unless the Greek government presents its plan to reduce the projected size of a fiscal gap for the 2014 budget.

The government has already sent e-mails and had teleconference calls with the troika. Labor Minister Yiannis Vroutsis was at the government headquarters until late last night for discussions as to how to cover the gap even though the troika has reduced its estimation by 1.7 billion euros.

The government has yet to reveal exactly where the troika’s “ultimatum” ends. The government has already rejected the lenders calls for a scrapping of the government’s new legislation that lets Greeks repay arrears to the state in 100 installments. Sources state that the government is also insisting on its position for the restriction of changes to social security and the joining of funds. The Greek government is reluctant to make changes until troika’s arrival to Greece.

Government sources are optimistic that they will be able to complete the review by the Eurogroup summit in December provided a date is set for troika’s visit to Greece on Thursday. Nonetheless, a “game of cat and mouse” is being played out as the “ball” is now in the court of the troika regarding their visit to Greece.

The uncertainty, however, caused 10-year Greek bonds to remain over 8.22% on Wednesday.

Main points of contention

* The fiscal gap for 2015 remains. Creditors had estimated the fiscal gap to over 3 billion, however the new review is at 1.8-2 billion euros. The Greek government believes that there is no gap.
* The government has agreed to cutting the salary costs in the Public sector by stopping overtime, travel costs etc.
* Both the conservative New Democracy Party and the socialist PASOK party that make up the coalition government believe that the lock-out legislation to restrict strike action should not be passed believing that the penal code’s allowance for the employer to cut pay on days when strike action is carried out to be sufficient.
* Following discussions between Prime Minister Antonis Samaras and Mr. Vroutsis as well as other government meetings, sources state that the Greek government is on the verge of agreeing to the 50% + 1 rule for decisions on strike action, however the PASOK party is against this position.
* The government is sticking to its legislation for the payment of overdue debts in 100 installments and won’t change the debt settlement plan.