Greece’s debt inspectors probe budget shortfall, plans to lift mortgage protection

ATHENS, Greece – International debt inspectors were meeting Tuesday with Greece’s finance minister to examine government claims that a financing shortfall next year can be covered without any major new austerity measures.

The officials from the “troika” — the European Union, European Central Bank and International Monetary Fund — are scrutinizing the government’s forecast that the bailout loans will be 500 million euros ($670 million) short of the country’s financing needs next year. Greece maintains the sum would be small enough to make up for without resorting to more spending cuts or tax increases.

The troika officials were in talks with Yannis Stournaras to reach an understanding on the issue before the government submits its 2014 budget to parliament at the end of next week.

They will also examine how to ease the government’s mortgage protection measures, the fate of loss-making state defence companies, and details of a mass public sector lay off plan.

As troika officials arrived for the meetings, cleaning staff recently laid off by the finance ministry staged a demonstration outside the ministry building, and were held back by riot police as they chanted “murderers, murderers” at the inspectors.

The government has promised not to impose any more across-the-board austerity measures — a pledge repeated during a weekend parliament debate by conservative Prime Minister Antonis Samaras, who is faced with growing discontent in his 15-month-old coalition.

Lawmakers from his own centre-right New Democracy party and Socialist coalition partners are threatening to vote against a planned new property tax. And Samaras on Monday saw his slender majority in parliament cut by one seat after a Socialist lawmaker was expelled from the party.

Meanwhile, Greece on Tuesday raised 1.3 billion euros in a 13-week treasury bill auction, at a rate of 3.9 per cent, unchanged from a month ago.