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Greece Prepares for Troika Talks

Greece defying TroikaAnother year and another set of tense talks with international lenders looms for Greece as Jan. 1 broke, coinciding with the beleaguered government taking the rotating, six-month symbolic helm of the European Union Presidency.
While the government was preparing for the pomp and circumstance, Finance Minister Yannis Stournaras was readying his negotiating guns to take on the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) whose envoys are set to return in mid-January to pick up where they left off; insisting on more reforms and that Greece produce a plan to fill a hole in the 2014 budget of some 1.4 billion euros.
Stournaras, backed by Prime Minister Antonis Samaras is attempting to counter growing criticism by many lawmakers in the government’s coalition of the Premier’s New Democracy Conservatives and their partner the PASOK Socialists about some of the ongoing austerity measures. They have generally barked and then relented.
The government wants to finish the next round of economic reforms pledged to the Troika before a Eurogroup summit on Jan. 27. The last of $325 billion from the two bailout packages will be disbursed this year and then Greece will be left on its own to try to figure out how to handle a still-staggering $430 billion debt and revenues far off expectations.
In addition to the next installment, for 4.9 billion euros, Stournaras underlined that “Greece cannot hold the EU presidency and have unresolved issues with the Troika. We’ll be trying to push for banking union and someone will disagree and bring up the issue of the Troika and our negotiations.” He added that they “definitely have to be wrapped up.”
The Troika envoys are expected in Athens in mid January, but not on the 8th when Athens is scheduled to welcome EU officials for a ceremony to assume the bloc’s presidency.
Still on the table is the delayed overhaul of the civil service, lagging tax collection targets and a slow-moving privatization drive.
Troika representatives, particularly from the IMF, are reportedly peeved at the government’s unilateral decision to cut the 23 percent Value Added Tax (VAT) that lenders insisted upon for restaurant and food services, to 13 percent in order to boost trade.
It was reduced as an experiment in the summer but Samaras, flush with the belief that Greece will hit a primary surplus and not need the Troika anymore, has been digging in his heels after 18 months of giving in to its demands.

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