Greece Economy Troika Presses for Wide, Fast-Track Reforms
Troika Presses for Wide, Fast-Track Reforms
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Greece’s international creditors, the EU, the IMF and the ECB –the so-called troika- are pressing the government for fast-track reforms in the framework of negotiations for the signing of a new, €130-billion bailout loan package.
At a four-hour meeting on Thursday, the Cabinet discussed the new measures and structural initiatives demanded by the troika, which include cuts in supplementary pensions, the lowering in the general level of wage costs, the full deregulation of closed-shop professions, the reduction in the number of public sector workers by 150,000 until 2015, and measures to cover a €2.2 billion shortfall in public revenues in 2011.
The Cabinet decided that a €2 billion shortfall in 2011 public revenues will be covered through cuts in the subsidies for medicines and in the defense budget. The government is anxious to avoid any new revenue-raising measures.
Sources said the discussion showed that the government wields little negotiating leverage and may be prepared to concede the abolition of the Christmas and holiday bonuses -amounting to two extra salaries- which, however, both employers and s find unnecessary.
According to unconfirmed reports, the troika, which conferred with Labor Minister Giorgos Koutroumanis this morning, insists on the abolition of the bonuses and the minimum wage
In a 10-page document handed to the government on Thursday, the troika also called for a 5% percent reduction in employers’ social security contributions and cuts in social security spending, a 25% increase in administratively-determined property prices and a shake-up in anti-corruption mechanisms. The list of demands further includes the sale of two or three large public enterprises by July, a reduction in the number of bank employees, abolition of a host of provisions protecting the professions of lawyer, notary, engineer, accountant, actuary and realtor.s
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