Greece’s lenders stand firm on new measures row

Greece’s lenders stand firm on new measures row

 

By Lefteris Yallouros – Athens

The argument between the Greek government and the country’s lenders over the necessity of fresh austerity measures needed next year is at boiling point.

On Tuesday, the Greek press reported the troika will insist on fiscal measures in 2014 rather than structural, measures. However, spending cuts amounting to 2 billion euros are unavoidable, sources said, while the Hellenic Defense Systems (EAS) and Hellenic Vehicle Industry (ELVO) will have to be shut down as the two state-run companies are a drain on public finances.

Following the reports, Greek government Vice President and Foreign Minister Evangelos Venizelos said in a press conference that new measures will be detrimental to the economy and they are unacceptable. Mr. Venizelos also said that the scene is being set recently on an international level to throw Greece back into the center of attention. He also said the troika cannot determine when there will be general elections in Greece, having ruled out that they will be called before the end of the 4 year term.

Meanwhile, an un-named EU Commission official was reported in the Greek press as saying that several Eurozone members are disappointed with the Greek government sending out the “no new measures” message and that it is more important to get on with reaching fiscal goals for 2014.

Goldman Sachs appeared to agree with this view, saying in a report that fresh measures will be needed in 2014 if Greece is to reach fiscal goals set out in the country’s adjustment program. The report also says there is a EUR 11 billion funding gap for the 2014-16 period that needs to be plugged.  GS analysts also predict Greece is nowhere near addressing the open market for its funding needs yet.