While the negotiations between the Greek government and the troika representatives slowly beginning to lead to agreements, the Tuesday afternoon Euroworking Group and evening Eurogroup sessions in Brussels will approve the one-billion-euro loan installment owed from July. According to an optimistic Finance Ministry officer, after completing the compliance report on Monday evening, which is based on the EAS restructure plan, the payment of the loan installment will be approved.
Unfortunately though there doesn’t seem to be an agreement on the primary residence auctions, with the troika insisting upon a complete and immediate regulation, while the Ministry of Growth is in favor of a more transitional scheme that would offer greater protection to vulnerable owners affected by the crisis.
The government wants to maintain the ban on auction for a further 12 months and to placate the troika has suggested a set of strict criteria, such as a maximum 25,000-euro income and an objective value of up to 160,000 euros. The troika on the other hand is concerned about the impact on the banking system and is not convinced by Greek arguments. Greece is prepared to unilaterally legislate on the matter should an agreement with the troika not be reached by Thursday.
The Minister of Growth Kostis Hatzidakis commented that “the troika has a stricter approach than us on the limits of protecting primary residence. We do not feel that is the best approach”, while adding that the current legislation allows some taxpayers to abuse the protection and avoid paying taxes.
In response to the significant time necessary to address such issues in the Greek courts, the troika has also demanded that the relevant judicial procedures be expedited. The Irish model, which includes provisions for good practices and a monitoring authority, seems like the likeliest candidate.
The IMF, ECB and EU representatives are going to return to Greece in January in order to come to an agreement at the Eurogroup scheduled for the 27th of January. The troika is expected to demand an alternative measure to cover for the revenue loss from the decision to reduce the VAT on food and restaurants to 13%. A finance ministry officer claimed this will be a structural measure.
