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Greek FinMin, Troika Agree on Fiscal 2013 Closing, Leaving Major Issues Pending

Stournaras_TroikaThe first stage of the troika of lenders’ review of the Greek economy has been completed and the representatives are leaving Athens, with agreement having been found only on the closing of the 2013 state budget.
According to high-level sources from the Finance ministry, following Saturday’s meeting between the troika and ministry officials, negotiations will continue for the next 15-20 days through email. The Greek side must show it’s proceeding in the implementation of its commitments and the lender representatives must coordinate their stance.
Pending issues include the following:
– The state budget for 2014, on which there is a three-prong disagreement between Greece and the troika: the draft law setting out the amount expected to be collected under the unified real estate tax, including its collectability; the initiatives needed for the health and pension funds; the General Accounting Office’s assessment on “tax conformity” (meaning an increase in tax revenues because of the economy’s resetting).
– The four prior actions for the release of the 1-billion-euro tranche, which is pending since July; according to the Finance ministry source, it is already too late to place the issue of the tranche on the agenda of the Euro Working Group convening early in October.
These include the defense industries and Larco; the mobility scheme for the public sector, especially university staff; the translation of the lawyers’ code in English so the troika may review it; the state’s payment of debts to the Athens and Thessaloniki water companies (which is expected to be completed within a fortnight).
– The promotion of infrastructural changes Greece has committed to
– The completion of the recapitalization of the banking system and liquidity improvement in the market
– The privatization schedule, which the troika is requesting be accelerated and become more flexible
– General regulations affecting health and pension funds.
The new state budget will be tabled in Parliament on October 7 and will essentially reflect mostly the closing of the 2013 financial year, with an expected a recession of 4% (it is assessed that 2014 will show a slim rise of 0.6% in the GDP). The primary surplus is expected to come to about 100 million euros. Finance ministry sources said agreement had been reached that there will be no emergency fee levied on businesses in support of OAEE, the self-employed and professionals insurance and pension fund, and that individuals in the armed forces and police and security personnel will not come under the unified wage regulations.
Troika representatives will return to Greece on October 14. The troika’s technical experts, however, will remain in Greece to continue negotiations with ministry officials.
(source: ana-mpa)

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