“The euro zone must deal with its main problems,” Stournaras noted. “A banking union… an economic policy which combines fiscal consolidation and growth, not all countries can impose austerity … and the most important: a common debt market, but this probably at the end.”

Stournaras added that Greece, which is in its sixth year of recession, needs a primary budget surplus and growth before it returns to the bond markets.

In an interview with Mega TV, Stournaras said: “we received the support we needed from the U.S.” He noted that the visit of Antonis Samaras in the United States was very important. “We agree with the U.S. in the overall attitude to the economic policy. By itself austerity does not bring results. The Eurozone must address its main problems with a banking union, an economic policy that combines development and a unified debt market,” the minister said.

President Obama would not have taken the risk of a positive statement if the Greek economy were not doing well, Stournaras added.

“I see no major conflicts between USA and Germany for the Greek debt, but a constructive dialogue. Greece must achieve a primary surplus at the end of 2013.”

When asked if the recession will end, the FinMin said: “data so far suggest that by the end of 2013 Greece will go into primary surplus. The recession in 2013 will be below 5%.” “My previous statement about growth in 2014 still stands,” he said.

By amending the agreement, substantial convergence is achieved, both with the standard Greek positions, and with the principles of the Organization for Economic Cooperation and Development (OECD) to avoid international double taxation, according to a press release by the Finance Ministry.

The protocol marks the beginning of an ambitious economic cooperation between the two countries and constitutes the first vital step for Greece for the attraction of investments coming from the United Arab Emirates, which have shown keen interest in investing in various sectors of the Greek economy.

Earlier this month, Greek Foreign Minister Dimitris Avramopoulos met with his counterpart UAE Foreign Minister H.H. Sheikh Abdullah bin Zayed Al Nahyan and discussed ways of enhancing relations and cooperation between the UAE and Greece in various sectors, especially in investment, trade and energy.

Shaikh Abdullah pointed out that the diplomatic relations between the two countries were established way back in 1975, witnessing a steady stable growth in bilateral relations, including trade and investment.

On his official visit to Greece, Shaikh Abdullah Bin Zayed Al Nahyan, Foreign Minister, called on the governments of the European Union to grant UAE citizens a 30-day visa upon their arrival in the EU.

Greece has repeatedly and strongly supported the exemption of UAE nationals from the need to obtain a Schengen Visa. In March, Avramopoulos sent a letter to the EU Commissioner for Home Affairs Mrs Cecilia Malmstrom requesting that the United Arab Emirates be included to the group of third countries that are going to be transferred to the Annex II of the relevant EC Regulation, listing third countries whose citizens do not require a visa in order to travel to the Schengen Area.

In the first four months of the year the balance of the budget showed a deficit of EUR 2.425 billion against a deficit of EUR 9.148 billion in the same period last year and a target for a deficit of EUR 5.74 billion this year.

The primary deficit amounted to EUR 306 million, down from EUR 1.73 billion in the January-to-April period last year and a target for EUR 3.613 billion this year. Net state budget revenues came to EUR 15.743 billion in the year to end-April, posting a rise of EUR 786 million or 5.3% from the target of 4.957 billion.

The revenues from the Public Investments Programme posted an increase of EUR 655 million from the target, reaching up to EUR 1.715 billion. State expenditure came to EUR 18.168 billion, posting a considerable decline by EUR 2.53 billion from the target set by the budget, and of 28.2% or EUR 7.123 billion from the same period last year, when Greece paid interest for the bonds included in the debt restructuring (PSI).

Meanwhile, Finance Ministry sources told tovima.gr that the troika representatives are expected to return to Athens on the 4th of June for the next evaluation.

The EUR 4.2 billion loan installment that Greece collected last Friday was used to pay off bonds worth EUR 5.6 billion on Monday that the European Central Bank held.

FinMin Yannis Stournaras is focusing on collecting the remaining 3.3 billion euros loan, which has conditionally been approved by the Eurogroup. The three conditions are to submit a detailed plan for combating corruption, a new plan for indebted households and the deregulation of the energy market.

However, the recent European Commission’s report indicates that the Greek government has not implemented many of the agreements. Of the 420 necessary actions stipulated in the terms of the third bail out loan (December 2012) 139 of them have not implemented, a rate of 33%. The Ministries of Labor and Health have the highest “fail” rates.

The government’s financial staff has a lot to prepare for in time for the troika visit, such as reducing the number of tax offices to 140 for the entire country, voting in the new law on the taxation of real estate property (by the end of June) and increasing the jurisdiction of General Secretary of Public Finances.

A new meeting between Finance Minister Yannis Stournaras and Administrative Reform minister Antonis Manitakis with troika representatives is expected to clarify further the pending issue of the dismissals of around 2,000 law-breaking civil servants.

According to media reports, troika representatives are pushing for a total of 7,000 layoffs of public servants within the year, to reach 20,000 by the end of 2014.

According to Kathimerini, Prime Minister Antonis Samaras is reportedly keen to clinch an agreement on all outstanding issues with the troika by tomorrow, chiefly so Stournaras can travel to Friday’s Eurogroup summit in Dublin with concrete progress to report ahead of an anticipated decision on a EUR 2.8-billion tranche of rescue funding later this month.

According to sources, the premier also wants the talks concluded quickly so he can present Greeks with some good news, though hopes were slim for such a quick breakthrough.

Meanwhile, the troika of lenders to Greece “did not place any veto on the merger” of National Bank and Eurobank, and whoever talks about “the failure” of the merger should not “jump the gun”, Finance Minister Yannis Stournaras said according to AMNA.

Speaking in Parliament, Stournaras clarified that the merger did not go ahead because both banks told the Bank of Greece that they could not come up with the 10% of the needed capital.

“Therefore, they can no longer be the judges of whether the merger can continue; the new shareholder must be the one to decide when recapitalisation is completed, and that will be the Financial Stability Fund. That does not mean the merger failed,” the finance minister said. “It may go ahead or not, depending on which criteria the Fund selects, based on the public interest. Therefore, nobody vetoed it. I, for one, wish they could have found the EUR 10 billion.”

The report, delivered to the government at the end of January, showed that tax inspections are falling short of their target, while in some cases the targets set are actually different to those provided for by the memorandum signed between Athens and its creditors.

According to AMNA, the 106-point report notes that employees at key agencies such as the tax office for major enterprises do not even have their own desks or computers, while generally the agencies that are crucial in the battle against tax evasion are understaffed and devoid of inspectors. Overlaps between various agencies are also common, resulting in problems in combating tax evasion. Worse, the internal affairs department has found evidence that some 130 tax inspectors are among those who have foreign bank accounts.

The international experts note that they consider it unlikely that the targets for collecting expired debts will be met in 2013 without direct interventions and hirings. The number of employees who conduct tax collection has not grown and the central agency that monitors expired debts is understaffed: It has a staff of just eight people, including the department head.

The report adds that the ministry’s internal forecast for collection of previous years’ debts in 2013 amounts to EUR 1.176 billion, against a memorandum commitment for EUR 1.9 billion. Last year the amount of overdue debts collected came to EUR 1.1 billion. The low level of collection is due to the fact that many debts are now seen to be non-collectible, as they concern bankrupt and liquidated companies and so on.

The experts call for the tax collection agencies to focus on major debts and to have their staff numbers boosted, along with the creation of an agency to focus exclusively on the 1,500 biggest debts and aim at the best possible collection results within 2013. Most recent IMF Reviews [Jan 2013] here.

Meanwhile, the Greek government will not be not expecting IMF spokesman Paul Thomsen together with the other two troika representatives that will come to Athens next Sunday. The IMF representative will be absent at the first meeting with Finance minister Yannis Stournaras, and the next appointment on Monday with Administrative Reform minister Antonis Manitakis.

According to top government sources, Thomsen’s absence does not concern the financial plan in Greece and is not associated with the scheduled meetings. Thomsen informed the Greek government that he has prior commitments that force him to come two days later.

According to media reports, in a meeting yesterday between Prime Minister Antonis Samaras and the government economic team headed by the FinMin, the austerity package was finalised. It included further cuts in salaries and pensions, increase of retirement age and abolition of the tax-free threshold for self-employed professionals. Final decisions will be made in a meeting between coalition party leaders tomorrow.

Sources told Kathimerini, yesterday’s meeting was to agree on the outlines of a package that will be acceptable to the two coalition partners, for an agreement to be reached before a Eurogroup working group on Friday. When they meet, the leaders are also expected to discuss when, and in what form, the package of measures is to be submitted to Parliament.

In comments made to Reuters, FinMin Stournaras referred to the cost of an extension of the fiscal adjustment programme for Greece. “We estimate the funding gap that would be created if we get the two-year extension at EUR 13 to 15 billion,” Stournaras said, adding that the size of Greece’s fiscal deficit was EUR 13.5 billion, hence the need for EUR 11.5 billion in spending cutbacks and EUR 2 billion in new revenues.

Stournaras’s comments came as Christine Lagarde, the head of the International Monetary Fund warned that Greece faces a financing gap that won’t be solved by budget measures being discussed because a weak economy and delayed privatizations have worsened its fiscal situation.

Ahead of today’s 24-hour general strike, government sources expressed concern about industrial action in recent days, particularly by public sector employees, which has slowed down the collection of tax revenue, Kathimerini reports.

Finance Minister Yannis Stournaras briefed the three leaders on where the savings would be made. Sources told Kathimerini that about EUR 7.5 billion of the EUR 11.5 billion have been identified. After leaving the meeting, Stournaras said the leaders agreed on the cuts and talks would continue in order to pinpoint further savings. “We had a very good discussion,” he told reporters after the meeting, Reuters writes. “We agreed on the basic direction.”

Venizelos and Kouvelis made statements after their talks with Samaras and indicated that there that there had been broad agreement among the leaders.

According to protothema.gr, the final proposals of the Finance ministry indicate that it is difficult to achieve the target of EUR 11.6 billion of austerity measures for 2013-2015 without major horizontal cuts across all sectors, even in wages and pensions. Government sources suggested that implementation of measures should start from late 2012 to cover the discrepancies of this year’s budget too. In this case, the newspaper says, it will be the political leaders again who will be forced to impose additional costs that the relevant ministers did not propose voluntarily.

The heavy burden falls on the Emplyoment ministry, with cuts reaching EUR 4 billion: EUR 2 billion from cuts in social and welfare benefits; EUR 2 billion from cuts on double pensions, cap on pensions, 10-20% reduction in the lump sum.

The Administrative Reform ministry should save over EUR 2 billion that will come from: administrative structure reduction by 30% (elimination of administrations, sectors); wage cuts in SOEs by extending the Single Payroll; closure-merger of organizations (more than 250 in the first phase); implementation of the “1 hiring in 10 layoffs” rule; forced transfers

Government sources suggest that is necessary to cut 2.15 billion euros from Health and Education, at a time when the Health minister admitted that pharmaceutical expenditure is out of control.

New measures could save:

EUR 2 billion from cuts in pharmaceutical spending, merging of services, reduction of operating costs, mergers of hospitals; EUR 100-150 million worth of cuts per year in operating expenses, grants and mergers of Universities and Technological Institutions

The ministries of Defense and Interior submitted their proposals for cuts, whereby both should save EUR 1.4 billion of costs. Defense came up with EUR 800 million: EUR 680 million from cuts in armament programs; EUR 120 from equivalent measures to avoid cuts in officers’ payrolls. Interior needs to save EUR 600 million: reduction in grants; closure of organizations and local government agenices; increase in the fee for immigrants.

An additional EUR 2 billion is sought through several cuts, with a horizontal reduction of operating costs in all ministries.

According to sources, Samaras’s letter states that Greece will stick to its bailout commitments but underlines that certain “adjustments” are necessary due to a worsening recession and high unemployment.

Greece’s financial situation though is unlikely  to dominate Thursday’s EU summit , with Germany’s Angela Merkel saying total debt liability would not be shared in her lifetime and giving little support to Italian and Spanish pleas for immediate crisis action, who have both appealed for European rescue funding recently.

“I don’t see total debt liability as long as I live,” Merkel was quoted as saying, a day after branding the idea of euro bonds “economically wrong and counterproductive”.

EU officials are most likely to discuss Greek calls for adjustments to the memorandum briefly, even though there appears to be little willingness for any concessions over and above an extension of Greece’s fiscal adjustment period, according to Kathimerini.

No decisions are expected to be taken concerning Greece’s financial situation before the planned visit to Athens  by Greece’s creditors, the EU, ECB and IMF, collectively known as the Troika, who have postponed their planned visit to Athens due to the ill-health of PM Samaras.

The Troika visit will now take place in July. The postponement will also delay the overdue €5 billion bail-out loan due to Greece, of which all but €100 million was due to go directly to the banks.

Earlier Wednesday the new finance minister, Yannis Stournaras, met with Papoulias to discuss political developments and preparations for the summit. Stournaras, who has not been sworn in yet as Greece’s finance minister, will to remain in Athens to prepare for a visit by troika officials. Outgoing Finance Minister Giorgos Zannias will join Papoulias at the EU summit.

Exiting the Presidential Palace, Venizelos said he presented Mr. Papoulias his views and experiences in light of the crucial summit, since Greece’s European partners expect the President to express the country’s position after June elections.

“The country has chosen the European path and the euro will struggle to be competitive again,” Venizelos said. He added that Greece is seeking an “organized review of the loan agreement” on the basis of the agenda of the Summit, which will address the crucial topics of growth and employment, according to ANA.

Meanwhile, yesterday’s meeting of the three coalition leaders at Prime Minister Antonis Samaras’ residence ended without statements shortly before 20:30. During the meeting, Samaras, Venizelos and Kouvelis discussed the coordination of the government, the priorities in the economy, the presence of Greece in Europe after the summit and more effective way of promoting the Greek positions, according to To Vima. They had a first discussion regarding the government’s programmatic statements in parliament, and an overall prioritization of the bills that will be passed by the government.

Economics Professor Yannis Stournaras was appointed the country’s new finance minister, the prime minister’s office said yesterday. “Prime Minister Antonis Samaras has decided to name Athens University economics professor and Director of (economic think-tank) IOBE Yannis Stournaras as Finance Minister,” a statement said. Party officials said the three Greek coalition leaders had quickly agreed on Samaras’ choice of Stournaras, 55, who is nicknamed “Mr. Euro” in Greece, according to Reuters.

Stournaras most recently was development minister in the caretaker government that led Greece to elections on June 17. He was chief economic adviser and aide to former Prime Minister Costas Simitis when Greece was negotiating entry to the euro, which it joined in 2001.