Low ex­pec­ta­tions for Eurogroup

Best Athens can hope for is im­mi­nent re­turn of in­sti­tu­tions to Greek cap­i­tal so re­view can be con­cluded

Kathimerini English - - Front Page -

Greece and its len­ders go into to­day’s Eurogroup meet­ing in Brus­sels with few ex­pec­ta­tions of a break­through and the best-case sce­nario for Athens be­ing an agree­ment for the in­sti­tu­tions and their mis­sion chiefs to re­turn to the Greek cap­i­tal.

A num­ber of un­re­solved is­sues re­mained after a week of ne­go­ti­a­tions be­tween Greek of­fi­cials and the cred­i­tors via tele­con­fer­ence last week. Th­ese in­cluded dis­agree­ments over pen­sion cuts, ex­pan­sion­ary counter-mea­sures, en­ergy mar­ket lib­er­al­iza­tion and la­bor re­forms.

The len­ders are de­mand­ing that Greece re- duces its pen­sion spend­ing by 1 per­cent of gross do­mes­tic prod­uct in 2020, but Athens would like to phase in the cuts be­tween 2020 and 2022.

To coun­ter­act the im­pact of the new fis­cal mea­sures re­quested by the cred­i­tors, the Greek gov­ern­ment wants to im­ple­ment the equiv­a­lent vol­ume of in­ter­ven­tions. Athens has ac­cepted the in­sti­tu­tions’ pro­posal to re­duce cor­po­rate tax but also wants to in­clude other mea­sures, such as low­er­ing the ENFIA prop­erty tax.

With re­gards to the dereg­u­la­tion of the en­ergy mar­ket, the cred­i­tors ap­pear to be­lieve that the cur­rent method of auc­tion­ing off elec­tric­ity to al­low third-party ac­cess to the mar­ket is not ef­fec­tive enough to re­duce the Pub­lic Power Cor­po­ra­tion’s share be­low 50 per­cent of the to­tal by 2020, as pre­vi­ously agreed. The gov­ern­ment, though, seems re­luc­tant to give the green light for the sale of PPC units in­stead.

In terms of la­bor re­form, there was no progress last week and sub­stan­tial dif­fer­ences re­main be­tween Greece and the In­ter­na­tional Mon­e­tary Fund, as well as be­tween the Euro­pean cred­i­tors and the Wash­ing­ton-based or­ga­ni­za­tion.

This means that the most that can be ex­pected at the Eurogroup is for all sides to agree there is enough com­mon ground for the mis­sions to re­turn to Athens to con­tinue ne­go­ti­a­tions with the aim of reach­ing a staff-level agree­ment. The IMF, how­ever, has made it clear that its of­fi­cials will not get on an air­plane un­less there is an agree­ment on the pen­sion, la­bor and en­ergy is­sues.

Gov­ern­ment sources said the prime min­is­ter’s of­fice is re­ceiv­ing mixed mes­sages about what re­sponse to ex­pect from the in­sti­tu­tions at the Eur­group, which is one of the rea­sons why Prime Min­is­ter Alexis Tsipras has re­frained from com­ment­ing on the ne­go­ti­a­tions in any de­tail.

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