By T. Tsiros
Expectations for a conclusion of the now delayed second review of the Greek program (third bailout) now aim for January 2017, as the most recent round of negotiations in Athens last week between creditors' representatives and the Greek side again ended with several issues still unresolved.
The delay, however, is not painless for the leftist Greek government coalition, as a 6.2-billion-euro bailout tranche will also be delayed. Of the sum, 1.8 billion euros is set aside for paying off arrears owed by the state, with the latter figure now exceeding six billion euros if outstanding income tax returns are included.
Indicative of the deadlock is the fact that the latest round of negotiations, over three days, reportedly posted the least progress of any mission in the past year-and-a-half of talks that transpired after the signing of the third memorandum (third bailout agreement).
Standing disagreement over labor sector liberalization -- mostly demanded by the IMF -- but also over the Tsipras government's insistence on the restoration of obligatory collective sector-wide bargaining negotiations were not even broached in talks last week. Likewise, creditors' forecast of a fiscal "gap" in 2018 also did not come up in negotiations, although the issue is one of the primary obstacles to concluding the second review.
Whatever negotiations will continue via teleconferencing next week, although attention has now shifted, in the short term, on the impact that a surprise announcement of a 617-million-euro "holiday bonus" for pensioners will have on the program.
By all accounts, the Greek side will point to figures showing a better-than-expected execution of the budget over the first 11 months of the year, and a forecast that the annual primary budget surplus will easily surpass the one-billion-euro target.
The argument, as presented by the Greek side, is that even with the deduction of the 617-million-euro "Yuletide bonus" for 1.6 million pensioners, a revenue "cushion" will still be in place to ensure than 2016 revenue targets are met.