Paris talks continue with added pressure on Greece to close fiscal gap

Author: newsroom  | Published: November 26, 2014

Government negotiations are continuing with the troika in Paris with the focus cast on tightening the fiscal gap through more reforms in the employment sector

Greek Finance Minister Gikas Hardouvelis arrived in Paris on Tuesday for a meeting with debt inspectors from the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF). The representatives of the troika and Greece are negotiating a review of the nation’s financial reforms just before the bailout loans end this year.

The two sides are at Villa Said trying to bridge a disagreement over a feared fiscal gap in the 2015 budget. Differences are in a number of matters that need to be discussed so that Finance Ministry Secretary General Anastasios Anastasatos can adequately represent Greece at the Euro Working Group on Thursday.

Matters of disagreement

* Troika believes that the fiscal gap in the 2015 budget is as high as 2.5 billion euros whereas Athens puts it at just 350 million euros that can be covered without new measures being necessary. Mr. Hardouvelis says that revenue is expected to be higher this year due to regulations for the covering of unlicensed structures.
* The studies conducted by global employment services show that mass dismissals are unnecessary and this has helped sway the troika who aren’t placing great pressure on this measure.
* Dismissals in the public sector are being put aside for the moment, however negotiations are considering on common salary rates with the government decided to not apply this rule until 2016 apart from a pilot program at the Ministry of Finance from July 2015.

The negotiating team of troika is comprised of European Commission economist Declan Costello, the ECB’s Klaus Masuch and the IMF’s Rishi Goyal. Representing the Greek side are Mr. Hardouvelis, Labor Minister Yiannis Vroutsis, Administrative and eGovernance Minister Kyriakos Mitsotakis, Deputy Finance Minister George Mavraganis and PM Advisors Chrysanthos Lazaridis and Stavros Papastavrou. Alternate Minister of Finance Christos Staikouris was in Paris for the first day of talks on Wednesday but back in Athens for Thursday’s focus on the budget in Greek Parliament.