Greece has said that the talks it has held with its debt inspectors have proven productive. The discussions have been to decide if the country should get more bailout money and have taken place between Greece, the International Monetary Fund, and European authorities. It resumes today.
No further details of Monday’s discussions, which took three hours, have been made public. Markets fell on Monday across the world, with fears of a default on investor’s minds, and amid the IMF asking for deeper spending cuts.
Monday evening saw a teleconference between the Deputy Prime Minister and Minister of Finance, Evangelos Venizelos, along with senior members of the Troika—which is comprised of the European Central Bank, the European Commission, and IMF.
Greece’s international debt creditors are worried that the country has not been doing enough in terms of austerity measures in order to receive any further bailout. The IMF warned that Greece needs better tax collection and more spending cuts rather than higher taxes in order to avoid defaulting on their debt.
The fears over the default saw the euro fall, along with oil prices, and the stock markets across the world. The FTSE 100 closed with a decrease of 2%, with the Cac in France falling 3%, and the Dow Jones on Wall Street finishing 0.9% lower after a recovery.
The country will likely close state programs that are inefficient and reduce the public sector workforce and wages, which are even higher than the equivalent employees in the private sector. In addition, the country has proposed an emergency property tax, which will be paid through household energy bills. This has been marked as a poor idea by Bob Traa, the IMF representative for Greece, who said that higher taxes would be unsustainable both politically and economically in the country.
However Mr. Traa does call for a more efficient system and stronger enforcement of tax evasion laws. Apparently, the Troika has outlined 15 measures for the Greek government to follow, including cutting 100,000 public sector jobs, 20,000 more than originally planned. The Greek Deputy Prime Minister, Mr. Venizelos, has claimed that the international institutions had been using Greece as a scapegoat that “hid their own lack of competence to manage the crisis”.