No 6th tranche until the finalization of the 2013-’14 measures

A second round of negotiations on new measures starts today. Venizelos returned from Luxembourg to Athens earlier than planned, not because he finished the great barter for the 6th tranche, but to devise new plans and measures for ’13-’14.

The government and the Troika are rewriting the memorandum from the start and as it appears, the foreign auditors do not intend to leave Athens again, neither to deliver a report that may release the next tranche before "locking" the objectives and measures until 2014.

The Troika will not give any money without new measures for ’13 and ’14, stressed Olli Rehn yesterday from Luxembourg.

While Eurogroup president Jean-Claude Juncker was handing out congratulations to our country for the bold steps taken so far, the European commissioner cautioned about additional ones, saying that it should be examined whether these measures meet the financial goals of the program.

The renewed goal of the Troika is not simply to lock the ’12 deficit at 6,8% of the GDP at all costs, but also to ensure that the Greek deficit will fall below 3% of the GDP by the end of the period.

To achieve this, the Greek Government is counting heavily on the new real estate tax included in the PPC bills. It wants to keep it until ’14, otherwise it would have to replace it with rougher recovery measures of 1,8-2 billion per year in ’13-’14.

But even so, from ’13 onwards the measure will not contribute any longer to the further reduction of the deficit from 6,8% to 3% within two years. So it will have to be complemented or reinforced by others, which will be decided in the coming days and weeks, probably by October 27.