A “convergence of views” on fiscal matters was on phrase on the lips of government officials on Friday after week-long talks between the Greek side and creditors’ top auditors wound up in Athens. Nevertheless, the admission that “much technical work remains to be done” to fulfill remaining “prior actions” came in quick succession.
Negotiations between the government’s top economic team and creditors’ representatives aim to conclude the third review of the ongoing bailout by the end of the year – or February at the very latest, according to European creditors.
As “N” has previously reported, the Greek side maintains that everyone around the negotiation table in Athens last week agreed that the government will meet fiscal targets for 2017 and 2018, i.e. a primary budget surplus of 2.8 percent of GDP this year, and 3.5 percent next year. Creditors, on their part, detected a 150 to 200 million euro budget gap for 2018, a sum that Athens considers as utterly manageable.
On the “down side”, there are doubts over whether important remaining “prior actions” can be completed, such as energy sector liberalization. The latter includes specific actions, such as listing which lignite-fired power plants owned and run by the dominant utility (PPC) must be sold off.
Other important privatizations must be commenced or shown to be on track, such as the sale of a majority stake in the natgas grid operator (DES.FA) and the red-tape-plagued Helleniko property development project.
Creditors – rechristened the “Institutions” by the leftist-rightist coalition government during the shambolic negotiations in the first half of 2015 – have also objected to the prospect of another “holiday bonus”. The Tsipras government wants to dole out the so-called "13th pension" come Christmas time to socially weaker groups. At last word, the amount is 800 million euros from this year’s forecasted budget surplus, down from a figure of one billion euros that made headlines two weeks ago.
However, creditors want any surplus cash to cover the Greek state’s arrears to the private sector, i.e. funneling the money back into the “real economy”
