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The talks with the supervisory Troika are still at their starting point since five key issues remain open, including the cuts in the public sector, the future of the defence industry, the insurance system, the hole in the 2014 budget and the VAT on restaurants.

Tomorrow's meeting between the finance team of the Greek government, headed by Minister of Finance Yiannis Stournaras and the lenders’ representatives will be particularly important as the participants will make their first estimates for the economy on the basis of the data collected and will probably prompt their common position.

In any case, it seems that the government is somewhat opposed to the Troika’s requirements, as it is starting to resolve the issue of the state arms companies in a manner that is far from the demands of the Troika which, in general, insists on closing them. The reaction of the lenders will be clear tomorrow, during the meeting with the finance team of the government.

At the same time, the government is anticipating the decision of the Troika’s representatives regarding the budget for 2014. The government insists that its parameters should remain as stated in the draft budget, excluding new measures, or including at least measures of up to 500 million euro obtained through cutting costs and by increasing the collection of social security contributions.

The Troika however insists on new measures, amounting to from 1.2 billion euro to 2.9 billion euro. On the one hand, the government states that it will not accept new measures but, on the other, it is preparing a list of the following measures that could cut costs: reduction of the pay of employees excluded from the unified payroll table, elimination of more tax reductions, elimination of the reduced VAT rates on the islands, elimination of the taxes in favour of third parties, increase in the cost of public transport tickets, electricity bills, and road tax.

The issue of the social security system remains open, as the lenders are not convinced of the effectiveness of the bill submitted by the Minister of Employment and Social Security and it seems that they want new measures with an immediate effect, namely reduction of pensions, lump-sum retirement benefits and so on.

Greek Defence Systems

Prime Minister Antonis Samaras and Foreign Minister Evangelos Venizelos confirmed yesterday the government's firm position in the negotiations with the Troika regarding Greek Defence Systems.

The government is pushing for the liquidation of the state-owned enterprise and maintaining its military section as well as for including the employees of its civilian sector in the mobility programme in order for the enterprise to be able to maintain its export character. The Greek side thus chooses the tactics of frontal confrontation with the Troika which insists on the immediate closure of Greek Defence Systems.

The opinion expressed during the meeting between Samaras and Venizelos was that the negotiations with the Troika should be completed as quickly as possible and both of them said that no new measures are being planned.

Reactions

The meeting between the Prime Minister and the Foreign Minister has provoked many comments in the opposition. The radical left SYRIZA attacked the government and the message of the party reads, "After the end of the "talks", the two partners supporting the Memorandum, Samaras and Venizelos, having condemned the new measures, are preparing to implement the "structural measures set", which are not new but will be introduced for the first time. It seems that word has lost its meaning for the Prime Minister and Deputy Prime Minister, as they consider "no measures" the changes in pensions, real estate and in Greek Defence Systems that they intend to shut down like they did with the state broadcaster ERT, and the list is endless until the state goes bankrupt."

The leader of Independent Greeks, Panos Kamenos, called Prime Minister Antonis Samaras "Evangelos Venizelos’ defender", adding that the Constitution has been repealed and the legislative acts of the Parliament have been replaced by regulations.

"Deputy Prime Minister Venizelos met with his defender Antonis Samaras to thank him once again for the immunity provided in exchange for the parliamentary majority which is voting the people-killing measures imposed by the Troika and Berlin", Kamenos states in a message.

Disagreements about VAT on restaurants

The issue of VAT on restaurants remains unresolved because, according to sources, the Troika insists on restoring its rate of 23% from the current 13% as of 1 January 2014 because the reduction of the tax has not produced the expected results with which the government disagrees.

The Ministry of Finance expects to obtain the data on VAT in the industry to present them to the Troika in order for the final decisions to be made. The representatives of the ttourism industry want to retain the VAT rate of 13%, as they believe that it reduces the cost of the tourist product.

The mobility in the public sector is another problem

Tomorrow's meeting between the lenders and Minister of Administrative Reform Kyriakos Mitsotakis in relation to mobility and government layoffs is particularly important as well.

The government is seriously concerned, as it is obliged to cut 4,000 employees by the end of December and to select 11,000 employees, on the basis of specific data, who are scheduled to be laid off in 2014.

This is expressly provided in the agreement of July that the government is trying to circumvent by insisting on its extension but the Troika calls for its strict implementation.

State broadcaster ERT

The refusal of the Troika to deduct from the number of redundancies the number of employees laid off from the state broadcaster ERT who however have been re-appointed is further complicating the work of the government.

The Troika has requested monthly monitoring of mobility and redundancy, asking for details from the Ministries of Finance and Administrative Reform. The lender’s representatives have also requested the plans, on a quarterly basis, for the cuts of 11,000 employees in 2014.

The list of 12,500 employees

At tomorrow's meeting, the representatives will expect to receive the list of names of 12,500 civil servants who will have to be included in the so-called labour reserve, which should have been prepared in September. They will also expect to obtain the preliminary list of another 12,500 employees who will have to be included in the mobility programme by the end of December 2013. 4,000 employees of that group will have to be cut from the public sector in 2013 and another 11,000 in 2014.