European Commission Vice President Valdis Dombrovskis left Greece with an ultimatum during his two-day visit to Greece on Thursday and Friday. He made it clear that prior actions need to be completed before the recapitalisation of banks can take place. Bearing in mind that Greece, according to EU officials, has yet to complete a third of prior actions, there is the danger that the Euroworking Group being held on Thursday will not ratify the disbursement of 2 billion euros benchmarked for Greece.

A frantic scramble is currently taking place so that Greek Parliament can ratify two new draft bills by Thursday in the hope that the tranche for Greece is disbursed. Greek and foreign technical teams worked until late on Tuesday in an effort to prepare the bill for banks. Officials that took part in the meetings state that there was progress, but the text had yet to be concluded. Hence, it is a race against time for the government rushing to push through the bill by Thursday.

Nonetheless, even if the installment of 2 billion euros for Greece is approved by Thursday, the money will not be forthcoming until the next week and Greece may be in for a negative review when the Eurogroup meets on November 5 to discuss the country’s progress.

Thorny issues between Greece and representatives of its international creditors from the EU and the International Monetary Fund include foreclosures and VAT hikes in education. On its part, the Greek government has pushed through some prior actions in the hope that the VAT hike already announced may receive an extension. For instance, the bill on the recapitalization of banks has already been pushed through in fast-track procedures so as to be voted on Friday and so that discussions on other pending issues can be discussed on Saturday.

Realising the gravity of the situation, the Ministry of Finance is considering alternative options in case there is a delay in instalments. the payment of subsidies and money from tax returns may be delayed until next Thursday.

The primary surplus at 1.8 billion euros for the nine months may prove to be plasmatic. In actual fact, the state funds have a 2.049-billion-euro deficit. The only revenue that the government will have as leverage will be that yielded from the single property tax (ENFIA) and money from state fund reserves that have been gathered in a joint account held by the Bank of Greece.