Sticking point in Greece bailout negotiations
- 21 September 2011
- From the section Business
I understand the sticking point in negotiations between the Greek government and the Troika is the latter's demand "that by the end of the year the deficit will be 7.5 % and that all fiscal measures will give us this outcome".
The current projection is 8.5% of GDP. Many economists believe this is unachievable, given the projected shrinkage of the Greek economy, the deteriorating tax take and the newly revised growth projections of the International Monetary Fund (IMF) for the global economy.
I've seen the reason why today.
I was told by anti-tax campaigners to turn up at a magistrates court. As I got there they invaded the building and blockaded two courtrooms, effectively preventing the auction of repossessed homes, chanting the slogan: "no homes in bankers' hands".
It was small scale, good natured and - as they say - granular.
The news dribbling out of the deal details 30,000 workers to be put into a "labour reserve" on 60% pay, pensions over 1,200 euros a month cut by 20% etc. These are the bits the government can actually achieve.
But it is tax raising that seems to be at a dead end, and if the IMF/EU stick to this position - which was briefed to me by a government member - it is quite hard to see it being achieved.