The talks, part of the process by which Greece must satisfy the lenders’ conditions in order to receive additional installments of bailout money, are the sort of painstaking discussions that Cyprus will soon be undertaking as part of the Cypriot government’s newly arranged €10 billion, or $13 billion, rescue. The Athens discussions are a reminder that working through a euro zone bailout can be a long march, requiring many politically unpopular steps by recipient governments.
The Greek government is trying to secure the release of two slices of rescue funding. One is a €2.8 billion allocation that had been due in March, and is conditional on Greece’s meeting its pledge to streamline the civil service. The other is a €6 billion payout for the second quarter of this year, which will be released only if inspectors are satisfied with the overall progress of the country’s economic overhaul.
On Thursday, addressing a joint conference with the European Commission at the Athens Concert Hall on improving the use of European funding, Prime Minister Antonis Samaras of Greece pointed to the first signs of economic recovery, citing government figures showing that hiring in the private sector outpaced layoffs last month for the first time in three years.
Talks broke off in March between the government and representatives of the so-called troika of creditors: the International Monetary Fund, the European Central Bank and the European Commission.
The resumed negotiations are to focus on the public-sector overhaul, with the troika expected to renew demands for laying off thousands of civil servants. Also high on the agenda is an unpopular property tax that was introduced as an emergency levy in September 2011 and which the government now wants to replace with a levy that imposes lower charges but also taxes farmland to offset the lost revenue.
An internal dispute over the troika’s demands for the extension of the tax had shaken the fragile coalition government in Greece. But last-ditch talks on Wednesday night produced a consensus. The finance minister, Yannis Stournaras, presented the government’s revised property tax proposal to the inspectors on Thursday during a three-hour meeting that touched on “all outstanding issues,” said a ministry official, who as a matter of policy could not be identified by name.
There was no response by the foreign envoys to the ministry’s proposal, according to the official, who said fresh talks would he held “soon.”
With household incomes down by a third after three years of austerity measures, and unemployment at nearly 27 percent, another point of contention is the number of installments that cash-strapped Greeks should be allowed in paying off about €55 billion in overdue taxes, social security debts and fines imposed for nonpayment of taxes.
The continuing recapitalization of Greek banks is also expected to figure prominently in the negotiations. Troika officials are said to harbor reservations about a merger under way between two major Greek lenders, National Bank of Greece and Eurobank, which are considered too big to let fail.
Troika representatives are also pressing Athens to step up efforts to raise money by selling state-owned assets. Notwithstanding the sale this week of diplomatic properties in London, Brussels, Belgrade and Nicosia, for a total of €41.1 million, the Greek government has little progress to report on the privatization front.
The aim is for this round of talks to conclude by April 14, before the next summit meeting of euro zone finance ministers.
Article source: http://www.nytimes.com/2013/04/05/business/global/greece-resumes-talks-with-creditors.html?partner=rss&emc=rss
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