John Ward – Euroblown : Troika Rejects 45% Of Athens Coalition ‘Savings’ – 12 September 2012

As The Slog predicted, the Troika is about to accuse the Greeks of holding out on so-called savings. Is Pandora’s box about to be jemmied open?

Only around 6 billion of the €11.5 billion in spending cuts calculated by the Greek government has been deemed realistic by the Troika. The triad of bondholders, ECB and IMF is now rumoured to be demanding immediate public sector sackings to enable Athens to make up the shortfall.

This is going to set an ambush of tigers loose among the European pigeons. On the one hand we have Merkel fessing up to the potential disaster of Grexit (and thus she won’t allow it) in the context of a German electorate already pissed off with what it sees as Greek perfidy. And on the other we have Bankfurt plus Lens Weidmann predicting that exactly this sort of thing was bound to happen…and will one day bankrupt the Bundesrepublik.

Representatives of the European Central Bank, the European Commission
and the International Monetary Fund met with Prime Minister Antonis
Samaras on Monday and ‘informed him of their scepticism about some of the
coalition’s measures’, although Samaras had known for some time of the suspicions. For those who are awake, The Slog reported some time ago how, at the root of this, there is a strong suspicion within the Troika that the Greek negotiators are holding back secret funds against what increasingly look like many upcoming rainy days.

Some €2.2 billion worth of cuts  (including about 1.2 billion in savings from reductions in operating costs in the public sector and 500 million euros in savings from financing for local authorities) have been rejected outright by Greece’s lenders as being unrealistic. The inspectors also asked for more details about some €3.5 billion worth of cuts. “We are trying to convince them about our position. The effort continues,” said Finance Minister Yannis Stournaras.

Whatever happens here, we are back at the old sticking point: Finance Ministry sources say the troika insists that some savings should come from immediate sackings in the public sector. The inspectors argue (silly them) that employees at public organisations already closed down should
be fired, but the politicians still hope to avoid direct sackings. And of course, we all know why: fired civil servants sing like canaries.

Stay tuned: this can only get worse. link to original article

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