Government to propose €1.3bn in measures to troika

Talks with troika resume on Monday

Savings to come from clamping down on tax and social security evasion and abuses, rolling out the unified pay scale in more of the civil service and wider public sector, merging and abolishing educational and health agencies and cutting spending by certain agencies

The government is to present the troika with an additional list of savings and austerity measures worth €1.3bn when talks between the two sides resume on Monday, Eleftherotypia has learned.

Finance Minister Yannis Stournaras Finance Minister Yannis Stournaras If this transpires, it will mean the government has abandoned its position that the fiscal gap for 2014 is only €500m, which it hoped to cover through structural measures alone. 

The negotiations, the third round concerning the government's current bailout programme review, will resume after troika representatives returned to Athens following their untimely departure last week without reaching an agreement with the government.

Agreement between the two sides is necessary for the green light to be given for the disbursement of the next loan tranche of the bailout package. Among the outstanding issues are the real-estate tax, the progress of the so-called mobility scheme to remove thousands of public employees from their positions and the reform of the social security system. 

Eleftherotypia understands that the bulk of the €1.3bn figure on the finance ministry list will come from a crackdown on social insurance evasion and abuses. The government believes it can gather €800m on this front, but the troika reckons that even €600m would be an ambitious estimate.

Another €300m would come from improving tax compliance and administration.

It also hopes to save €60m by further rolling out the unified salary scale in the public sector and public utilities and agencies, where large discrepancies remain three years after a law calling for uniform pay rates was passed.

The sum of €100m would come from cutting back on spending by certain private legal entities and public utilities.

And, last by not least, €40m would be saved by merging or abolishing state agencies, primarily in the health and education sector. 

In addition, the government plans to cut €250m from its public investment programme, in order to to cover the gap that will result from the introduction of the new single property tax and to secure backbencher support for the measure when it comes before parliament.

Although there is some urgency to the meetings as the government must submit the 2014 draft budget to parliament by Thursday, Stournaras has ruled out any agreement being reached on Monday.

The fact that the savings list amounts to €1.3bn means the government has abandoned its position that the fiscal gap for 2014 would amount to €500m and has moved closer to the troika's estimates. 

The austerity enforcers believe that the gap – the difference between the present value of a country's future expenditures and its future receipts - is in the region of €2bn. 

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