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Troika Presses Greece For More Reforms

troikaTalks between Greece and envoys from its international lenders immediately led to more demands for reforms and pressure on the government to shed itself of one of its defense industries and improve the woeful rate of tax collection with a budget hole of as much as 2.9 billion euros ($3.9 billion) looming for 2014.
Representatives of the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) met with Finance Minister Yannis Stournaras on Nov. 5 and are due to have a powwow with Administrative Reform Minister Kyriakos Mitsotakis on Nov. 8. He is charged with overseeing the so-called mobility scheme to transfer, suspend or fire 40,000 workers over the next two years which is also far behind schedule.
The government is eager for the Troika to give approval to a pending loan installment of one billion euros ($1.37 billion) and agree on reforms before the Nov. 21 deadline for submitting its budget to Parliament and two coming sessions of the Eurogroup, which also deals with the loan packages.
Deputy Minister of Finances Christos Staikouras released data showing that revenues in October were 24 percent above the monthly goal set by the Troika but that coincided with another report showing the government leaves 50 percent of taxes uncollected during a crushing economic crisis.
In a bid to boost business, the Troika wants a 3.9 percent cut in the level of social security contributions employers are obliged to pay but at the same time wants the closing or streamlining of the loss-making state firms Hellenic Defense Systems (EAS) as well as ELVO and the mining operation Larco.
Greece reportedly rebuffed the demand to make changes at EAS with the lenders insisting the bloated staff be cut from 900 to 341 because the company has little standing in the market. Stournaras ignored it, saying the state defense firms should be “export-oriented” although they aren’t.
The government is going to request a reduction of the taxes on heating oil. The recent reduction of the VAT on food (from 23% to 13%) will be used as an example of how such a reduction could increase consumption and tax revenue overall, it was said.

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