Greek government officials and representatives of the country’s creditors were Friday seeking to resolve yet another last-minute disagreement in order to release the much delayed one billion tranche of the loan.
The Euro Working Group gave the green light for the release of the sum earlier this week, subject to a few additional conditions, after coalition MPs voted a new raft of economic reforms through Parliament.
However, a new stumbling block appeared Friday with Greek and foreign officials disagreeing about the cost of diagnostic tests. The creditors assessed that the state makes too high a contribution to the cost of diagnostic tests carried out at private clinics. Although the issue was not expected to be a deal-breaker, there had been no agreement by late last night. The creditors are proposing a reduction of 40 percent in the cost of tests while the Health Ministry is willing to impose a cut of up to 22.5 percent. The move would put pressure on clinics to either reduce their costs or roll over the additional amount that the state is no longer able to cover to their patients.
The 2015 budget had earmarked 302 million euros for state contributions to diagnostic clinics, but the claims made by clinics to the country’s main healthcare provider (EOPYY) are estimated to reach 510 million euros. Such a discrepancy is no longer acceptable to the creditors.
Greek officials are keen to tie up the loose ends relating to the last set of prior actions so that the 1 billion euros in loans linked to them can be released by the end of the year. They must then shift their focus to the much tougher challenge of overhauling the ailing pension system and completing the framework for a new tax system.
The Greek government is hoping that full compliance with the lender’s demands will open the door to discussions about debt relief in ‘some form’ , a commitment the lenders made when Athens accepted the conditions of the third memorandum. Yet time and time again the lenders have rejected the figures and proposals presented by the Greek government and greater demands are made on Greek taxpayers in order to increase revenue and meet the level of primary surplus demanded by Europe.
It remains to be seen if the faith the Greek government puts on the lenders keeping their promises is justified, and how much of the Greek economy will be left standing by the trime the creditors decide to discuss debt relief.
