The new review of Greece's fiscal adjustment program by troika chief auditors started on Tuesday "in good climate," Greek government sources said, as anti-austerity protesters held the Finance Ministry in central Athens "under siege."

Greek Finance Minister Yannis Stournaras and Labor Minister Yannis Vroutsis launched the fresh round of tough talks with the envoys of Greece's international lenders on the terms of the disbursement of the next one billion euro (1.35 billion U.S. dollars) bailout aid pending since summer in the coming weeks.

On the agenda of discussions, according to sources, were the key prior actions Greece needs to fulfill this time before securing further rescue loans under the bailout agreements, as well as the 2014 fiscal gap and ways to bridge it.

After the first meeting at the Finance Ministry on Tuesday, Greek officials speaking on condition of anonymity said that the negotiations began in "good climate," despite diverging views among the two sides.

Athens sticked to its estimate of a 500-million-euro fiscal gap next year, while troika inspectors from the European Union, the European Central Bank, and the International Monetary Fund who kept the country afloat since 2010 with multi-billion loans in exchange of a harsh austerity and reform program, see a 2.5-billion-euro gap.

Stournaras insisted that the figure included in the draft budget was "realistic," while Greek Prime Minister Antonis Samaras in an interview with a Greek television channel reiterated that there was no more space for austerity to address shortfalls.

Greek officials argue that any additional policies introduced in the future to meet goals set should be limited to structural reforms rather than new pay cuts and tax hikes which have fuelled recession now in its sixth year.

They express confidence that it is feasible through raised tax revenues and the slowdown of recession.

In regards to the prior actions, the two sides need to strike a deal over the fate of Greece's loss-making state defense firms, EAS and ELVO and mining company LARKO. Creditors push for their immediate closure or sale. The government suggests an overhaul with limited dismissals of employees.

Greek officials and troika representatives also need to reach a compromise over the insurance reform. The former argued that the 1.5 billion euro gap can be addressed via combating contributions evasion. The latter, however, expressed doubts whether Greeks can make it.

Another thorny issue on the table is the progress of the wider overhaul of civil services through obligatory transfers and layoffs of civil servants in order to slash deficits.

Athens assured that the plan to relocate and place 25,000 employees by the end of 2013 on reduced pay with the prospect of layoff next year was moving forward smoothly. Auditors appeared skeptical.

The inspectors had a taste of protesters' wrath at the plans to streamline the public sector on Tuesday. About fifty Finance Ministry employees briefly chanted slogans just outside the office where negotiations were held, while a protester "welcomed" the inspectors by hurling coins against them.

On Wednesday, Greece will be hit by a new general strike organized by the two main labor unions of public and private sector employees in protest of austerity and reforms, as the government insists that this is the only way to exit the debt crisis and that the return to growth is near. Endi

Go to Forum >>0 Comment(s)