After reaching a deadlock over how to achieve the target of a primary surplus for 2014, talks between the Greek government and its international creditors have come to a temporary halt. (Includes EC press release and IMF/Lagarde statement.)
Sources say that the inspectors are expected back in Athens at the end of October as no decision is likely to be made ahead of the formation of the new German government or before a solution can be found on the issue of the Greek programme’s funding gap.
Finance Ministry officials noted on Monday that after the completion of the first round of negotiations with the mission of the European Commission, the European Central Bank and the International Monetary Fund – known as the troika – the Greek side estimates that it will take measures worth €500 million to achieve the primary surplus planned for 2014, amounting to €2.8 billion. The same officials added that the troika believes heftier measures are required, with one estimate raising their impact to €1.5 billion.
The ministry insists that no measures affecting salaries, pensions or taxation will be taken, but it has not ruled out structural measures such as the closure of additional state entities in an effort to cut down on spending and restructure the public sector. Officials note that the ministry has presented the troika with proposals for measures to cover the gap the Greek side expects for next year, but no agreement has been reached yet.
A mission from the European Commission, ECB, and IMF that has been reviewing the government's economic programme has made good progress. To allow completion of technical work, policy discussions in Athens will pause, and are expected to resume in the coming weeks. In the meantime, contacts will continue between staff and the Greek authorities.
Commission press release, 29.9.13
Ms Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued the following statement after a meeting with Antonis Samaras, Prime Minister of Greece, in Washington today:
“Prime Minister Samaras and I had a productive discussion this afternoon on recent economic developments and challenges facing Greece. I commended him on the progress that Greece has made under its economic programme towards fiscal sustainability, restoring competitiveness and financial stability, and stressed the importance of moving forward on institutional and structural reforms and implementing a robust 2014 budget to achieve the programme’s objectives. I assured him that the IMF remains committed to helping Greece in this endeavour.”
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