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Greece has updated the agreement with its lenders

06 July 2013 / 16:07:22  GRReporter
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The final agreement between the Ministry of Finance and the Troika regarding the new update of the Memorandum is a matter of hours. It will fill the financial gap amounting to 1.9 billion euro for 2013-2014, according to the Troika, and will resolve within two years the issue connected with the changes in the public sector.

Late last night, the differences between the representatives of the lenders were focused on the measures which could fill the gap resulting from the delays of the insurance funds which, in turn, have led to a shortfall of 1.2 billion euro in the national health organization. 500 million of this sum will be covered by the adjustment of the costs of private clinics and testing centres (claw back). The measure, according to a senior source from the Ministry of Health, will be included in a bill which will be submitted for a vote on Monday. The amount to be saved will cover about 90% of the shortfall in the national health organization for 2013. In order for the remaining amount to be covered, the Troika insists on implementing the measures that are included in the Memorandum but which have not yet been applied. More specifically, it insists on further cuts in the pensions of policemen and military through the application of the uniform payroll table. The lenders also insist on the imposition of a fee of two per thousand on the endorsement of companies. The first measure will bring about 250 million euro and the fee on the endorsement of companies will collect revenue to the amount of 600 million euro, 150 million of which will be collected in 2013 and 450 million in 2014. This will cover mainly the shortfall in the insurance company of liberal professions. As an equivalent measure, the ministry is proposing a revision of taxation and cuts in defence spending to the amount of about 100 million euro in order for it to avoid further pension cuts.

According to a senior official of the Ministry of Finance, the pressure to approve the reduction in VAT on restaurants continues. The Ministry is proposing an increase in the rate of luxury tax as compensation for the 300 million euro which will be lost.

It is clear that the Troika has heard and noted all equivalent measures proposed by the Greek side. The same source states that the harsh bill is already being written and that it will include the majority of the requirements in order for the country to be able to receive the tranche in July. The bill will contain a tax code but no provisions related to the restructuring of the Greek arms company and the Greek defence system, as expected, as well as the long-term measures of the ministries of employment, finance and development.

Who are those 12,500?

Meanwhile, the “axe” is hanging over the heads of the employees of local government organizations and in the education sector, and there is one more sudden death, namely that of the municipal police. The period of the “availability mode” has also been reduced. It seems that the summer round of negotiations with the Troika is over.

Minister of Administrative Reform Kyriakos Mitsotakis

Minister of Administrative Reform Kyriakos Mitsotakis participated in the talks with the Troika for more than three hours yesterday. The negotiations will continue on Sunday, when the new measures related to the mobility of civil servants will be specified. Yesterday, during the lenders' meeting with the Minister of Administrative Reform and Minister of Internal Affairs Yiannis Mihelakis, there was consensus on the majority of the new measures.

According to the available information after the meeting, the two sides have agreed on the first wave of 12,500 redundancies in the public sector by the end of 2013. They will include 5,000 teachers, 4,000 employees of local government organizations (3,500 of whom from the municipal police), 2,500 employees of the Ministry of Education and 1,500 from the administration in result of the merger of agencies and organizations. It seems that the pressure on the local government organizations does not stop with the municipal police since, under the bill the Ministry of the Interior is preparing, it is expected that another 3,000 employees will be transferred. The local government remains the major subject of redundancies.

Availability mode

As for the rest who will be laid off by the end of 2014, they will be part of those employees who will not be reappointed to the new scheme of the public broadcaster as well as of municipalities and ministries subsequently. The majority of them will most probably be employees of the Ministry of Education and those who will be in "availability mode" for a short while in particular. The term of the "availability mode" has been reduced from 12 to 6 months.

Employees’ reactions  

The employees of local government organizations are indignant at the news of the 'sudden death' of the municipal police and those people working in other sectors affected by the changes are also planning their future actions. The municipal police announced that they would refrain from any actions over the weekend whereas the unions of the employees of local government organizations and the organization of Greek municipalities condemned the cuts in the municipal police. According to the organization of municipalities, local government organizations are the only victim that is paying for the idleness of others. Athens Mayor George Kaminis said that he was against this plan.

Parties’ reactions

The information about the cuts in the public sector has provoked the negative reaction of the opposition too.

Tags: TroikaNegotiationsCuts of public workersMunicipal policeKyriakos Mitsotakis
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