Negotiations with the Troika have been suspended

Negotiations between finance minister Evangelos Venizelos and the auditors have been suspended, once again causing anxiety about the forthcoming tranche by the Troika.

Reportedly, the two sides disagreed on the deficit, as the economic team argued that because of the recession it is further increased. In particular, it is expected to range from 7,6% to 8,1%-8,2% of the GDP, a difference that the government argues can be covered without additional measures. The Troika believes that the deficit lies at around 8.6%-8.7% of the GDP due to omissions and gaps in government policy.

For this reason, the Troika representatives called for additional measures worth 1,7 billion euros, as they observed a lag in revenue by approximately 1,1 billion and increased spending by 600 million related to pension funds.

Thus, the Troika requirement for immediate additional interventions and measures met with strong opposition from the Ministry of Finance, because this development would further affect the decline in Greek economy.

According to members of the economy team, after contacting the Prime Minister the finance minister decided to "freeze" the negotiations with the Troika and resume the discussion in the next 10 days.

The same sources indicate that the approval of the sixth tranche of the loan will be delayed until the end of the month, while the original date was set for September 15.

The two sides also disagreed on the issue of privatizations. The memorandum provides for revenues of over 1 billion euros to be collected by state funds throughout September, which is difficult under the stock market climate in our country, and so the economic team requested an extension.

But the situation seemed to be on the edge from the start, as the Troika dished out sharp criticism and expressed strong dissatisfaction at the delays recorded in the public sector’s single payroll, the abolishing of agencies, the pushing forward of privatizations and the permanent shortfall in revenue collection.