April 16, 2021

As Lenders Return to Greece, Athens Seeks Relief

ATHENS — The international lenders overseeing Greece’s bailout were back in Athens on Monday for their latest audit, as Greek officials hope dissent in the lending group might allow them new negotiating room.

It was the first time high-ranking representatives of the troika — the International Monetary Fund, the European Commission and the European Central Bank — have assembled here since an I.M.F. report last week conceded that it had made mistakes in Greece’s first foreign bailout. The report prompted angry reactions from the European Commission, not to mention Greek citizens weary of years of recession and austerity measures imposed by the lenders.

Finance Minister Yannis Stournaras met with the foreign envoys Monday for the first in a series of talks expected to focus on Greek pledges for layoffs in the civil service, an overhaul of the dysfunctional tax collection system and the status of a slow-moving effort to raise money by selling off state assets. Athens is obliged to show progress on those and other commitments to secure a tranche of 3.3 billion euros, or $4.4 billion, in rescue loans that are scheduled to be dispensed this month.

A ministry official described the first meeting as “a discussion and an exchange of views about where we are and how we see things.”

“We didn’t decide on anything,’’ he said. “All issues remain open.”

Having arranged two bailouts for Greece worth a combined 240 billion euros over the last three years, the troika has been handing out the aid in installments in exchange for the country’s adopting economic changes and hitting austerity targets. Many Greeks have protested those measures, which have helped slash living standards as the country enters its sixth year of recession and have played a part in an unemployment rate that has reached 27 percent.

Greek government officials hope that the string of errors highlighted in the I.M.F.’s internal report might prompt the troika to ease demands for more painful reforms. The report concluded that the fund made serious miscalculations and failed to anticipate the severity of Greece’s economic downturn. The I.M.F.’s admission has given Greece some “negotiating power,” Mr. Stournaras said in an interview with the center-left To Vima newspaper on Sunday.

Among the concessions he is expected to seek is the lowering of the value-added tax on restaurants and taverns – to 13 percent, from 23 percent — as a way to lighten the burden on small businesses and help the crucial tourism sector, which is forecasting a record year of 17 million foreign visitors.

Government officials are also expected to ask for a reprieve in the approximately 2,000 layoffs in the civil service that the troika wants to see over the summer; Athens fears that possible labor protests and transport strikes would hamper tourism. Greece had committed to dismissing 4,000 public sector workers this year and an additional 11,000 in 2014. Even after those cuts, the number of Greek civil servants would be above 600,000, compared with around three million working in the private sector.

Other issues likely to be discussed are an expected funding gap of 4.6 billion euros for financing the bailout program in 2014 and measures that will be taken to cover the shortfall. Also on the table might be discussion of how likely it is that Greece’s international creditors might be forced to take some losses on their holdings of Greek debt next year to ease the country’s financial burden.

Another big topic on the agenda is Greece’s huge untapped potential for privatizing government-owned assets. But Athens received an unpleasant surprise when the Russian energy giant Gazprom failed to submit an offer for the Greece’s public gas corporation, Depa, by Monday’s deadline. Athens had hoped to close a deal with Gazprom after meetings in recent months between the Russian company’s chief executive, Alexey Miller, and the Greek prime minister, Antonis Samaras. Gazprom made a preliminary bid last year of 900 million euros, and a final bid of around 800 million euros had been expected.

Some Greek media reports Monday said the deal went sour following a dispute over the price at which Gazprom would supply gas to Greek households. Others reported that objections by the European Union’s competition authorities, which have been investigating Gazprom since last fall, led the Russians to withdraw their interest. Greece’s privatization agency, Taiped, was expected to issue a statement later in the day.

Addressing supporters of his conservative New Democracy Party, which leads Greece’s ruling coalition, in the northern port of Thessaloniki on Sunday, Mr. Samaras said the government was “doing everything in our power to attract investments.” He accused the main leftist opposition party, Syriza, which opposes the terms of Greece’s foreign bailouts and has pledged to reverse all privatizations if it comes to power, of “doing all it can to chase investments away.”

Article source: http://www.nytimes.com/2013/06/11/business/global/as-lenders-return-to-greece-athens-seeks-relief.html?partner=rss&emc=rss

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