Greece talks with creditors failed

Greece talks with creditors failed

Greece and creditors discussed changes in the leadership of banks and the role of the financial stability Fund. Problematic issues remain settlement of non-performing loans, protection from the sale of auctions a single housing debtors, the reform of the social insurance funds.

ATHENS, 16 Nov. Gennady Melnik. The negotiations of the Greek government with the creditors Quartet ended at 6 am (Moscow time), the agreement could not be reached — disagreement remains on the issue of non-performing loans and protection against sale to a single housing debtors, told reporters high-ranking source in the Ministry of Finance of Greece.

According to him, the creditors agreed changes in the management of banks and role of the financial stability Fund.

The latest round of negotiations lasted 17 hours prior to this meeting was 14 hours and ended at 2am. Regular talks will start at 14:00. Prior to that, there will be a meeting of the economic staff of the government of Prime Minister Alexis Tsipras.

Previously the government Council on economic policy of Greece thought possible until 14 November to reach agreement on controversial issues.

Without agreement with the Quartet to implement the programme of reforms Greece will not receive the next tranche of the loan of 2 billion euros and 10 billion euros to recapitalize the banks. The working group of the Eurogroup will discuss the Greek question on Tuesday.

Greece has undertaken to coordinate all their actions in the economic sphere with creditors and to demand an ambitious program of reforms.


The main problematic issues in the negotiations remain the settlement of nonperforming loans (the sum comes to 107 billion euros, and among the many debtors have taken out mortgages), protection from the sale of auctions a single housing debtors, the reform of the social insurance funds, including pension, and taxes that could replace revenues from the introduction of VAT at 23% on education.

The most difficult for the Greek government are social security and protection from the sale of property of debtors. These issues are on the list of so-called “prior actions” — measures that the Greek government must take for credit.

The Greek government will have to decide what to do with non-performing loans: mortgage, consumer, business.

According to the degree of housing Greece is one of the first places in Europe — according to various estimates, 70-80% of the Greeks have their own housing, house or apartment. However, many have not paid off mortgages or Bank loans taken for other purposes. In the ongoing crisis in the country in its eighth year, many debtors in connection with the falling production and rising unemployment have lost the opportunity to repay their loans. According to the reviewers, if the housing will be sold under the hammer, more than 150 thousand families can remain without roof over the head.

The Greek government has assured of inviolability of housing for people with low and middle incomes, and claims that his aim is to protect housing 60% of borrowers.

The differences concern the criteria by which accommodations the debtor can be sold at auction to repay the debt. Creditors insist on the possibility of this at the cost of property more than 120 thousand euros and income of a debtor more than 24 thousand euros per year for a family with three children. The government, for its part, offered to protect the housing if its price does not exceed 180 thousand euros, and the income of the debtor less than 35 million euros per year for a family of four. However, according to media reports, in recent negotiations, the Greek authorities have agreed to reduce criteria income up to 30 thousand euros per year.

With regard to social insurance and pension provision, lenders required to join social insurance funds, to cease additional payments (the so-called epicurean) pensions, which consist of cumulative contributions to private and occupational insurance funds, but those who are early retired, to reduce pensions by 40%.

The Greek government has raised the retirement age to 67 years for those who began working since 1993, but the current law provides for numerous exceptions, allow you to retire even at the age of 50. In the coming years, these exceptions will be cancelled and early retirement becomes unprofitable. In this case, the minimum pension for civil servants may be reduced to 365 euros. Now it is 486 euros. In General, the average pension in the country is 666 euros.

In the first place the recalculation of pensions may relate to the military and the police.

The Minister of national defence of Greece Panos Kammenos, the Junior partner in the ruling coalition, is doing everything to prevent this from happening. The government is aware that Cyprus may withdraw from the government, and this will not only lead to the collapse of coalitions and early elections, but also would undermine the electoral base of the current coalition, told a source in government circles.

“These two issues can cause a social explosion. But there are other measures that the government had committed itself to. The following months will be very challenging to study — not just November or December, but the entire first quarter of 2016 when the government will, in accordance with its obligations to adopt laws on the austerity measures. If the government will survive these difficult months, the situation stabilizes, ” — said the Agency interlocutor.

According to him, first during the reign of the nationwide strike and mass rally against the new austerity measures, in Athens only brought together tens of thousands of people, will be a test for the government.

Meanwhile, some observers believe that the change in government and the creation of a new coalition SYRIZA — PASOK parties and “Sweats”.

The Tsipras government was faced with another problem — roslagen work of the state apparatus. The government shall issue to the vote in Parliament, do not study the issues, and then were forced to hastily abort.

According to the organization of public administration was one of the main issues during the visit of French President Francois Hollande in Greece on 22-23 October.

“Now Greece is constantly a French working group that helps in the organization of state administration”, — said the source.

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