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Troika set to get tough over Greece budget shortfall

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Greece's international creditors are due to meet the country's finance minister Tuesday for talks over the country's bailout program and the holes in its budget, discussions which are central to the government receiving more aid.

Inspectors from the European Union, International Monetary Fund (IMF) and European Central Bank (ECB) are due to meet with Finance Minister Yannis Stournaras on Tuesday morning.

There were doubts that the meeting would take place after differences over how to plug Greece's funding gap emerged last week but, on the eve of the visit on Monday, the country's prime minister appeared resolute that the differences could be resolved.

Trying to quell public fears over the return of the creditors, Prime Minister Antonis Samaras told the nation via a Greek television broadcast that the country was not "at war" with international lenders.

"First of all let me say something - let's do away with this notion that we are in some kind of war...It is a negotiation."

He argued that it was possible to close Greece's fiscal gap in 2014 and achieve its goal of a primary surplus without more austerity – austerity which he said the country could and would not take.

Greece has been relying on two bailouts worth 240 billion from its fellow euro countries and the International Monetary Fund since 2010 when it could no longer afford to raise money on its own.

The loans came with strict spending and reform rules which, in turn, put the brakes on Greece's economy, keeping it mired in a six-year recession. Greece's debt pile, meanwhile, is the highest in the euro zone with the debt-to-GDP burden at 160.5 percent and unemployment is at record highs, particularly among the under the age of 25.

"Society cannot take it, the economy cannot take it, and it is not even required by the country's current financial situation," Samaras insisted.

(Read more: Paulson leads charge into Greek banks)

The issue of the funding gap was first raised in the summer, with reports that the country could face a shortfall of ten billion euros ($13.1 billion). However, the latest reports suggest that the funding gap amounts to a two billion euro ($2.7 billion) hole in the 2014 budget, euro zone officials told Reuters in late October.

(Read more: Greece's tourism sector to boost economy: Minister)

What is unknown is how the troika of lenders will respond to the gap -- tantamount to Greece's failure to meet the strict conditions of its bailout programs – as Samaras' government has already rejected more wage and pension cuts or tax increases.

The troika, meanwhile, is reported to be unhappy at the slow government progress over the privatization of public assets and implementation of reforms.

A glimmer of hope came on Tuesday, however, from the European Commission. In the body's latest economic report, the Commission forecast that Greece's gross domestic product (GDP) would grow 0.6 percent in 2014 and 2.9 percent in 2015.

Saying that Greece's recovery was "in sight" it also revised its growth forecasts for 2013, predicting that the economy will contract by 4, rather than a previously predicted 4.2 percent.

It said a "strong revival" in tourism, on which Greece heavily relies had particularly helped the economy.

(Read more: EU Commission cuts euro zone growth forecasts for 2014)

Senior market analyst at CMC Markets, Michael Hewson, said that the success of the latest visit to check on the development of Europe's "perennial problem child" would depend on how lenders ultimately resolve Greece's growing indebtedness.

(Read more: Shunned by Europe, Greece turns to Saudi prince)

"The troika are returning to Athens as the perennial problem child of Greece grapples with another shortfall in its 2014 finances [but] one thing is certain, whatever the size of the fiscal gap, a fudge of some sort will be found to release the next tranche of funds, " Hewson said in a note on Tuesday. "The main problem remains the IMF whose future participation is contingent on Greece's debt being sustainable, which it clearly isn't."

-By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt

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