Troika sees progress on budget cuts in Greece
GREECE HAS made progress in finding the budget cuts needed to continue its bailout programme but the work is not complete and international inspectors will return in September for a final verdict, officials said yesterday.
Inspectors from the troika (the International Monetary Fund, the European Commission and the European Central Bank) concluded a visit to Greece yesterday saying the talks with the new government had been productive.
“Talks went well, we made good progress. We will take a break and come back in early September,” the IMF’s mission chief for Greece Poul Thomsen said after a meeting at the finance ministry.
Greece has pledged a series of fiscal and reform measures worth €11.5 billion to convince international lenders to keep Athens hooked to a €130 billion lifeline and avoid bankruptcy.
With a €3.2 billion bond maturing in August, and Greek officials warning the state will run out of cash within weeks, the troika’s review is crucial for the country’s survival.
“The discussions on the implementation of the programme were productive and there was overall agreement on the need to strengthen policy efforts to achieve its objectives,” the troika said in a joint statement.
“The Greek authorities are committed to proceeding, with determination, in their work over the next month,” they added.
Athens blames a deeper-than-expected recession for falling behind on its targets and wants to be given more time to catch up.
Lenders say that slow reforms have not given the programme a chance to work.
In yesterday’s Ethnos newspaper, finance minister Yannis Stournaras said the measures were needed to bring the programme back on track and will help Athens restore credibility with its European partners.
“A credible programme will allow us to support negotiations on extending its time-frame with tangible arguments which, coupled with reforms and privatisations, will get the country out of recession,” he said.
Greek officials have temporarily set aside requests for renegotiation while they hammer out fiscal measures for 2013-2014, mostly salary, pension and welfare cuts. “We have done a lot of work to be able to agree today on a fair amount of the €11.5 billion of measures,” said a finance ministry official who requested anonymity.
Meanwhile, a political row has erupted in Athens after the former head of a large Greek state bank admitted to transferring €8 million of personal savings abroad to buy a London property months before his Agricultural Bank headed towards insolvency.
Theodoros Pantalakis, former chief executive of Greece’s Agricultural Bank (ATEbank), strongly denied any wrongdoing and said he had declared the transaction to authorities in 2011 and had paid tax on the amount transferred.
One Greek banker, who declined to be identified said: “Nobody has suggested Mr Pantalakis sent the funds abroad illegally . . . But there is clearly an ethical issue since he was serving as the head of a big state bank at a time of financial and economic crisis.”