Galery

1

Victoria Mindova

The 31 billion euro tranche to Greece will be delayed, local economic analysts estimated and its payment is not expected before November. It should have been allowed after the Eurogroup meeting in early October, but the Greek state is delaying the final decisions on how and where it will cut funds to adjust the balance. The talks between the government and creditors remain open.

"There is some progress," Minister of Finance Yiannis Stournaras said after the second meeting with the heads of international creditors this week. "They were more open to a dialogue," a source from the ministry said. Head of supervisory mission of the European Commission Matthias Morse described the meeting with Stournaras as constructive.
    
Despite the brief positive messages of the Minister of Finance and the representatives of the creditors, many questions remain open. The main problems are in health care, local government organizations, administrative reforms and military spending. Spending in these areas remains high for the critical state of the Greek economy and cuts made here are expected to cause serious social and public responses.

Negative moods in Greece are prevailing again after creditors have approved further cuts in pensions and salaries at all levels in the public sector. These measures are the main trump card that the government holds and are the major part of the six billion euro agreed at the first meeting with the Minister on Sunday.

Many points in the programme of fiscal consolidation remain unclear. Supervisors insist on another meeting with the relevant ministers responsible for the sectors of concern in order to specify the cuts in the health care system, in the budgets of municipalities and in public administration.

While Stournaras’ meeting with representatives of the International Monetary Fund, European Central Bank and European Commission was in course, representatives of the military came to the ministry. Their salaries are expected to be cut by 7% by 2014. If Greece recovers positive economic growth after this period, they can be increased, but there is no guarantee. "We have a list of suggestions for cost optimization in our area, which can save a substantial amount of money in the budget," representatives of the military stated upon leaving the Ministry of Finance.
 
One of the measures the military proposed is for the government to unite in one place the training centres for young cadets that are scattered all over the country. This will save millions of euro for the maintenance and operation of training centres, uniformed employees said. Another proposal is to develop alternative sources of power generation to save the high cost of electricity. "Currently, a small base on the island is paying the Public Power Corporation about 800 thousand euro a month. These costs can be cut in half with the development of alternative energy sources," the military insisted. Such projects are not a priority for the government, which is still struggling to adjust the budget spending with the revenue that has been declining each year. In the short term, the situation in Greece remains critical because the country does not avail a wide range of alternative sources to meet its immediate obligations and the financial aid continues to recede.