Greek Finance Minister Giannis Stournaras will be attending todays Eurogroup meeting with a mission to assuage impatient EU Finance Ministers, ahead of the return of Troika officials.
It is expected that Stournaras will use Greece’s 2013 budget surplus as an example of Greece’s continuing economic progress. According to the National Bank of Greece, Greece has achieved a 1.5 billion euro budget surplus for 2013 – a major step forward compared to the 4.1 billion euro deficit of 2012, for the same January-November time period. This difference is largely due to a trade deficit that’s 2.7 billion euro lower, and to increases in the current transfers and services surpluses (up by 2.2 billion euro and 1.5 billion euro, respectively).
The Greek government will be under immense pressure following the stalled talks between the EU, ECB and IMF officials known as the Troika. Negotiations for the 2014 Greek Fiscal Policy began in September of last year only to grind to a halt, with Troika officials leaving Greece indefinitely.
Stournaras will have to work out a deal for a number of pressing issues. The first concerns a recent Greek Supreme Court ruling that retroactively reinstated the salaries of uniformed officers and judges, at a price tag that may be anywhere from 300 million to one billion euro. The second important issue is the 2014-2015 funding deficits which have been calculated by the Troika at 1.5 and 3 billion euro respectively.
The Troika is also pressuring for an immensely unpopular and significant relaxation of mass layoff rules, and the closing of a 800 million euro deficit in employer contributions. Troika officials are expected to return soon after an initial Eurogroup understanding is reached, as no official agreements will be made in today’s session.
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