Greece relieved as troika agrees to return to country

Visit to discuss continued assistance to cash-strapped nation begins on Tuesday

Greece is set to resume talks with the men who hold the keys to its financial stability after international inspectors said they would return to the country in a move that ends days of drama over whether they would come at all.

Mission heads representing the European Union, the European Central Bank and International Monetary Fund– the three bodies that have propped up the debt-stricken Greek economy since May 2010 – will meet government officials in Athens on Tuesday.

“The visit will happen,” said one visibly relieved Greek government official.

“This is no time for thrillers, even if we have our differences with the troika,” he added, referring to the three organisations.

The auditors accepted they should return after Greece’s finance minister, Yannis Stournaras, incensed at the possibility of the talks being postponed, reportedly negotiated late into Friday night to ensure that didn’t happen.

The troika’s most recent inspection began in September before being paused and was initially expected to resume at the end of October, then pushed back to Monday.

At stake is a €1bn (£850m) cash instalment – the latest handout from a €240bn package of rescue loans – that the cash-strapped nation desperately needs to pay the salaries and pensions of its large public sector.

Stournaras, an Oxford-trained macro-econonomics professor, is believed to have presented a new proposal to the team outlining plans to plug a fiscal gap that the troika says will likely be as much as €2.5bn in 2015.

Athens has argued vehemently that it will be much less. In recent weeks, amid mounting opposition over the prospect of fresh austerity, the government has insisted that if social security contributions are adjusted, adequate savings can be made.

With the country’s prime minister, Antonis Samaras also ruling out new belt-tightening measures on a populace worn down by years of cuts, it remained unclear how Stournaras had managed to defuse the standoff or what his new proposal entailed, though some insiders said the stalemate was broken when Greece sent the lenders information on how it could fill the fiscal gap and meet other bailout targets, including privatisations.

“We have [on Friday] evening received further information from Athens which means we can confirm our travel plans. Our team will thus be in Athens at the beginning of the coming week,” the European Commission’s spokesman, Simon O’Connor said.

Until now the troika has dug in its heels, demanding that Athens’s ruling coalition press ahead with increasingly stringent budget-reducing policies to fill the gap.

Highlighting the tensions that have gradually built up between the two sides, the normally mild-manned Stournaras called for common sense to prevail in an interview published on Sunday.

“There are solutions for all matters, as long as there is realism, flexibility and common sense on all sides,” he told the Sunday Kathimerini.

“We all have to be calm. Our lenders have to pay close attention to the fact that the Greek economy is turning around which the markets have already recognised.”

After managing to pull off the biggest fiscal consolidation on record in the four years since the extent of its debt load was revealed, Athens has stepped up demands that it be cut some slack.

But the country’s creditors have claimed that Greece is not making enough progress with the privatisations of state industries and lay-offs in the public sector.

In return for continued financial assistance, Greece has agreed to cut up to 40,000 civil servants from the payroll over the next two years.

“There are growing differences between Athens and the troika,” one eurozone official said in Brussels.

“The Greeks are saying ‘we are doing enough’ and the troika says they need new steps to close the budget.” © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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