Greece cedes ground to troika

Prime Minister Antonis Samaras had his first meeting with top-ranking envoys representing the country’s foreign creditors on Thursday and sought to convince them of his government’s commitment to getting the economy back on track while also sounding them out on some possible concessions that could curb rising unemployment and a deepening recession.

In a statement issued by his office after his talks with officials of the European Commission, European Central Bank and International Monetary Fund, known as the troika, the premier’s office said Samaras “repeated the basic positions regarding the future of the Greek economy as set out in his letter to leaders of the eurozone attending the recent EU summit.” In that letter, Samaras had vowed to honor the targets of the Greece’s loan deal with creditors while asking for some “necessary modifications.” The statement yesterday added that the government is “determined to proceed more effectively with fiscal adjustment and to speed up structural reform in order to ensure economic recovery, create jobs and secure social cohesion.”

The premier reportedly heralded an ambitious privatization program while asking for softer terms regarding wages, pensions and planned layoffs in the state sector. The troika officials were said to have maintained a tough stance. Their chief goal, however, is to assess the government’s intentions. Any negotiations would take place later this month after the troika’s technical teams compile a report.

The strongest indication that Greece would not seek to violate the terms of its bailout came in a statement by Finance Minister Yannis Stournaras, who met with troika officials after being sworn into his new role in the morning. “The program is off track and we can’t ask for anything from our creditors before we get it back on course,” he told the Financial Times after meeting with troika officials. One of the mission chiefs told him he would have “a tough time at the Eurogroup meeting on Monday,” he said. Stournaras is to meet again with the troika on Sunday following the presentation in Parliament today of the government’s policy program. “We are entering very deep waters, the years ahead will be difficult,” he said adding that “there is light at the end of the tunnel, but the tunnel is long.”

According to sources, Greece’s state and social budget is 1.5 to 2 billion euros off target due to a shortfall in tax collection and excessive spending by social security funds and the Manpower Organization (OAED).