Greece aims to come to an agreement with creditors on taxation, pensions and red loans by Friday, but the IMF remains strict on its demands on closing the fiscal gap.
Athens wants to complete the bailout program evaluation as soon as possible in order to get the 5.7-billion-euro loan tranche and enter negotiations on debt easing. According to sources close to the government, there is worry that state revenues will not be enough to cover Greece’s financial obligations without the next loan tranche.
However, the International Monetary Fund apparently disagrees with the measures the Greek government proposes and tries to delay the deal. According to sources close to the negotiations, IMF’s Delia Velculescu speaks of “adequacy of commitments” in terms of insurance funds but opposes, as she has done from the beginning, to increases in contributions. It is likely that IMF’s disagreement might extend talks until the end of the month.
On the other hand, the Greek negotiating team is trying to keep talks on all issues at the level of agreement “in principle,” but without making excessive concessions.
The differences on low income taxation, increased security fund contributions and basic national pension remain, however, with both sides not willing to back down. The issue of bad loans is another thorny issue, with creditors insisting that they should be sold to distress funds.
On the issue of the establishment of an independent privatization fund headed by non-political persons and approved by creditors, both sides seem to have come to an agreement.
Taxation, insurance funds and red loans will be discussed again on Thursday’s meeting.
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