Troika on hold due to PSI

According to reports the much-awaited arrival of the Troika auditors is indefinitely postponed because the jam in the PSI negotiations delays the whole program of consultations on the new loan agreement.

Although it has been known for a while now that IMF and E.U. officials would start work today in Athens, finally only the technical teams of the Troika came, as the executives will probably wait for the outcome of the PSI talks, which are entering their final stage this Wednesday, with the arrival of Dalara.

However, the resumption of negotiations on the new loan agreement also requires finding the right balance in the negotiations with the banks.

In these circumstances the government is required to find solutions to many side problems of the talks that are now being held on multiple levels.

Until it can find a solution with the foreign banks for the installments, the terms and the interest rates of the new bonds, the economic team must provide the Troika with convincing answers, both on financial discrepancies and the progress of structural changes in order to avoid additional measures without jeopardizing the signing of the new loan agreement.

The economy team appears optimistic that negotiations with the banks will soon begin again and their differences will be overcome, without compromising the voluntary nature of the haircut.

As for the negotiations on the new loan agreement, apart from the data on the financial performance of the previous year that will determine whether additional measures will be required, the Troika will request data on changes in labor relations, drastic reduction of the public sector, rationalization of health costs and a more effective response to tax evasion.

After the ineffectiveness of redundancy, mergers and terminations of Organizations, measures to reduce the number of civil servants to 150,000 and SOEs are the issues expected to be at the top of the agenda.

Regarding taxation, the Troika does not hide its great distress for the government’s delay in restructuring the audit services and its inability to collect overdue payments and effectively address tax evasion focusing on special categories of taxpayers.

Regarding health costs, the Troika expects evidence of the reduction of operating costs of hospitals, and will highlight the memorandum obligation to reduce administrative and medical staff in the new Health Service Agency.