No deal in sight at Monday’s EuroWorking Group on Greece

Saturday’s three and a half hours teleconference between Greece creditors and 5 key Greek Ministers involved in negotiations -Finance Minister Euclid Tsakalotos, Economy and Development Minister Dimitris Papadimitriou, Labour Minister Efi Achtzoglou, Alternate Finance Minister Giorgos Chouliarakis, and Environment and Energy Minister Giorgos Stathakis- revealed the rift between the two sides on a number of major issues. The two sides convened in an effort to send a message of agreement before Monday’s EuroWorking Group meeting, but failed to find common grounds on the matters of labour reforms, the non-performing loans, and energy and fiscal issues. The extent of disagreement can be highlighted by the fact that at one point Labour Minister Achtzoglou departed from the conference leaving the other participants to continue the discussion on the other matters of contention. A government source present during the teleconference said that no agreement would be reached before Monday, adding that although another teleconference would take place at a technical staff level on Sunday with the hope of making some progress, most matters would most probably close after Tuesday. According to government sources, the key areas of disagreement include:

• 1. Labour matters, with the creditors adopting a tough stance, especially the IMF, while the government is standing by its position that collective bargaining is within the best EU practices. The institutions are contemning to push for mass layoffs, with the IMF persisting for the adoption of a lockout clause, while the Greek side arguing the current status should remain unchanged.
• 2. Greece’s creditors insist that the energy markets should open up, while they are demanding the sale of 49% of the Independent Power Transmission Operator (ADMIE) by September 2017. In addition to this, they are pushing for retail energy market to open up.
• 3. On the subject of pending bank loans, the two main issues of contention include whether the outstanding debts from VAT and compound interest on bank loans will be cut. The issue will be discussed during Sunday’s technical staff level teleconference.

Meanwhile, the European Commissioner for Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici is expected to arrive in Athens on Monday for a 2-day visit, in an attempt to pave the way for a political agreement at the crucial December 5 EuroGroup meeting. However, judging from the views expressed to Austrian newspaper Der Standard by Klaus Regling, the managing director of the European Stability Mechanism (ESM) -the largest loan contributor with 171 billion euros of the Greek bailout program- any hopes by the Greek side of receiving debt relief were shattered. Regling blasted the tactics used by the current SYRIZA-ANEL government ruling out any possibility of a debt restructuring. “When the adjustment program comes to an end in 2018 we will analyse the debt sustainability. If necessary we will act”, he stressed.

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