The Seven Points Of Friction Between Greece and IMF/EU/ECB
IMF/EU/ECB officials arrive in Athens on Tuesday, raising serious objections regarding privatizations, development of real estate assets, state-owned banks and packages of measures.
There are seven main points of friction between Greece and the troika officials, while the government is reportedly in very difficult position, as it has to convince that it would reverse several-month delays and probably launch more measures than already has announced.
In case Greece’s progress does not meet the requirements of the troika, the disbursement of the fifth aid tranche in June would be at risk and a diplomatic marathon is expected regarding the extension of the repayment period of the loan. However, if it yields under troika’s pressure, the passing of the medium-term plan by the Parliament may fail, as the package is already facing a fierce intraparty opposition.
According to senior government officials, a year after the signing of the Memorandum of Understanding, the days of grace seem long passed. The government is under heavy pressure for more decisive moves regarding privatizations, reforms and measures.
The main points of controversy:
* €50b privatization program. Yesterday’s discussion in the cabinet regarding the privatization of Public Power Corporation has been intense.
The government retreated again recently, suggesting that only an amount of €15b is binding. The publication of this statement triggered a new “crisis” in its relation with the troika, as they believe that the preservation of state control in many public enterprises that Greek government announced, reduces the revenues from privatizations.
*Development of real estate assets. There is a growing concern about possible further postponements caused by delays in notification of proposals of banks-consultants for real estate assets. In addition, not a single investment has started through the Fast Track procedure.
*Banks. There is concern about the results of the Greek banks’ stress tests, while a great need for mergers and acquisitions is expressed, along with the fierce criticism for government’s insistence on state control in ATEbank and Hellenic Postbank.
*Structural reforms. The liberation of professions is not considered enough, while there are delays in the National Strategic Reference Framework and in initiatives to stimulate competition. If nothing is done, then recession would probably continue, bringing more measures.
*2011 measures. The government insists that €3b additional measures will be sufficient, but the adequacy of the amount is disputed after the revision of 2010 deficit.
*New measures. Troika officials disagree with the law bill regarding the arbitrary buildings as key revenue measure, while they refer to the equation of taxation on heating oil and fuel.
*€23b package for the period of 2012-2015. Troika asks for major cut in social benefits, insurance and payroll in public corporations. It remains unknown if troika will accept the government’s expectations for the raising of €12b through measures against tax evasion.
(capital.gr)
