With empty hands at Eurogroup

Eurogroup will deal with Greece's progress, but sources form the European Commission sources emphasize that the tripartite committee will return to Athens after the Eurogroup. Greece now has set a new date, a milestone for April Fool's Day, when the informal Eurogroup meeting in Athens will take place, with the government planning the "formal" session.

Jam due to... salary increases!

Labor issues are a important part of the relationship between the troika and the government. For this reason, many meetings between the tripartite committee and John Vroutsis, in presence of Stournaras took place the past few days. The troika maintains its stance on massive layoffs in the private sector, while it persists in its proposal to reduce employer contributions.

The two sides have agreed about the gap, which will result in funds totaling 700 million, in order to close the primary surplus. They also agreed for a EFAPAX next July. However, they disagree on a technical issue with particular importance. The government proposed a reduction of 2.9% from the employer's contributions and of 1% from those insured, while the troika refuses stubbornly, since this would lead to an increase in wages!

IMF declined about the banks

After the announcement of the Bank of Greece on the results of stress tests of Blackrock, which showed that banks need new capital needs 6.4 billion euros, the tension between the IMF and Ministry of Economy was renewed. After a weekend of tough negotiations about the banks and about the insistence of the IMF, it appears that the negative sentiment has improved, but Paul Thomsen didn't give a "carte blanche".

A attribute of the climate that prevailed the previous days is that the "hard" troika threatened not to sign the joint statement of progress. Thomsen argued that the gap isn't 6.4 billion euros, but larger, while reportedly carrying continuously the view of IMF, that if the ECB adopted the Bank of Greece's data (they chose the baseline scenario, rather the unfavorable) a general unreliability of the European system would follow and affect the stress tests of European financial institutions in November.

The compromise came after the announcements from the banks themselves about the way they will cover the gaps. However, the issue of banks isn't resolved, since there is still a possibility that increases in share capitals of banks may not effect immediately, but with other European banks at the end of 2014. This scenario, however, complicates the situation, since new options will be created for international funds and "threaten" the full coverage of banks, which aren't classified as highly reliable. These issues will be discussed at Eurogroup , with members of economic team indicating that the meeting might continue after Monday.

A matter of time for the bill

The deposit of a new bill in the parliament for the recapitalizing of banks seems to be a matter of days. The plan is a prerequisite for future increases in share capital of banks. The tripartite committee had a meeting yesterday on the matter, with the leadership of the EFSF and the Minister of Economics Stournaras. This bill will pave the way for increases in banks' share capitals and mainly Eurobank, since EFSF owns it.