Local time on August 5, Greece end its international creditors "Big Three" - the European Commission, European Central Bank and International Monetary Fund (IMF) talks. The same day, the IMF statement said the two sides to enhance its policy efforts to reach a preliminary agreement, fruitful talks with the Greek authorities. The talks group is expected to return to Greece in early September to continue consultations to reach a final resolution to determine whether to inject 130 billion euros in the second round of aid to Greece.
Greece's new government table sincerity
The central issue in the talks is Greece's economic policy, on how to restore economic growth and competitiveness, ensuring sustainable financial security, to support and strengthen confidence in the financial system to discuss. The statement said the next month, Greece's commitment determined to carry out the established work.
While the new government took office just six weeks showed great sincerity. The Greek government has promised a series of fiscal and reform measures, in order to obtain relief funds in order to avoid national bankruptcy. The program includes the 2013 to 2014 from the financial expenditure of the wages, pensions and benefits to cut 11.5 billion euros.
Greek Finance Minister YiannisStournaras for the avoid pressurizing debt default and were expelled from the fate of the euro area, the next few weeks, the Greek is a critical period, he will at all costs to reduce the budget deficit. Greek Development Minister CostisHadzidakis said, at all the political costs of reform to foreign convey the determination of Greece.
Even if the creditor does not doubt the attitude of Greece, Greece's ability to whether to honor their commitments is still skeptical. 2010, for the first round and 110 billion euros in aid, Greece developed in accordance with the demands of creditors budget targets, but were not met. Greece's budget deficit and GDP in 2010 and 2011 accounted for 10.6% and 9.6%, 8.1% and 7.6% of its EU goals set far apart.
According to the second round of the aid program announced in February this year, 2020, the Greek government debt to GDP ratio from 160% reduced to 120.5 percent, the IMF will not be able to fund aid for Greece. The euro-zone research report shows that Greece will not be able to meet the conditions. The other two requests for assistance to reduce the private sector minimum wage, years 3.2 billion reduction in government spending, lay off 15,000 civil servants. However, due to the Greek elections, the first half of these plans basically at a standstill.
It is worth noting that 3.2 billion euros of debt due in August in Greece, the Greek Ministry of Finance said that this will result in cash reserves are exhausted in a few weeks. The European Commission has reiterated that, before September, will not be provided to Greece next assistance payment, if the Greek central bank funds dry up, Greece will be forced to re-print drachmas.
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