the Greek government finds it hard to get a loan, amid internal party strife and long delays in the implementation of the Memorandum of Understanding.
Poul Thomsen (IMF) Claus Mazuch (ECB) and Matthias Mors (EU) arrive in Athens and will be briefed by the troika representatives that had been monitoring ministries’ progress during the last week. On Wednesday, they will start the meetings with ministers about the new package of measures.
The package should be finalized before the meeting of Eurogroup next Monday, and presented there by the Minister of Finance. Then, it should be approved by the troika and the Cabinet, and finally introduced before the Parliament for a vote by a simple or increased majority.
A senior government official admitted on Monday that Greece is claiming a new loan for 2012-2013, which would bring on a new or supplemental Memorandum of Understanding.
This would mean that the medium-term plan would be turned into a binding agreement. Troika’s requirements would be tough as Greece’s bargaining power is limited. The Greek government is huddled up in a corner, as it is willing to ensure a new loan and the extension of the existing at all costs, while it seems unable to address the long delays in the implementation of the Memorandum.
The international lenders want to take matters into their own hands, requiring a stricter permanent supervision on Greece’s progress.
Moreover, it focuses on three areas:
-Privatisation: Greece hasn’t even announced the consultants of the privatisation program, while the internal dispute peaks regarding the future of large state-owned companies.
-SOEs/Public Entities: Not all public enterprises have sent a financial report, while transfers of employees have not yet implemented.
-Budget Deficit: The 2010 deficit was reduced by 5% of GDP (instead of 6%), but government is considered to has already used all administrative simple measures available (horizontal cuts in wages, pensions and raising indirect taxes).
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