According to Kathimerini the EC-ECB-IMF troika is demanding that Greece increase the frontloading of the measures implemented in 2013 (EUR 9.2 billion from EUR 7.8 billion) because they believe the Greek economy will perform worse than forecast in the draft 2013 budget presented by Finance Minister Yannis Stournaras this week. The government predicted that the recession will reach 3.8% of GDP next year but the troika believes that the contraction is likely to be as high as 5%, Finance Ministry sources said.
The troika thinks this will lead to Greece wiping out its primary deficit next year but not achieving a primary surplus of 1.1% of GDP, as forecast by the Finance Ministry.
Meanwhile, FinMin Stournaras extended the deadline for an agreement with the troika head representatives in talks to unlock the next tranche of international aid, according to Bloomberg. “We’ll see,” Stournaras said after a meeting with Prime Minister Antonis Samaras yesterday in response to a question by reporters over whether Greece will conclude talks in time for the EU summit on Oct. 18.
Troika is still pressing government to proceed to layoffs of public employees immediately. EC-ECB-IUMF representatives do not seem to be convinced about the time frames of the Administrative Reform ministry and the determination of the government for the immediate removal of disloyal servants from the public sector. Thus, yesterday they once again raised the issue of forced retirements, which for them should reach 15,000 employees, according to protothema.gr.
According to Reuters, “Every step Greece takes to shore up its finances seems to make it harder for Athens to make the numbers add up in the long-term, especially when it comes to its spiraling debt.”
According to the agency, “2013 budget plan contained some positive news – for example, the expectation that Greece will have a primary budget surplus, before debt financing costs, for the first time since 2002 – as well as some more alarming forecasts. Chief among those was an acknowledgement that the economy will shrink again next year, by 3.8 percent, the sixth annual contraction in succession, and that the debt-to-GDP ratio will rise to 179.3 percent in 2013, a dauntingly high figure. The bottom line is that Greece is in a worse state now than even the most pessimistic forecast just six months ago. ”