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The lenders want liquidation of the arms companies

03 September 2013 / 19:09:03  GRReporter
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The supervisory Troika has blocked the plans of the Greek government to apply recovery measures in three state-owned enterprises without closing them, namely the state-owned enterprise LARKO, the company producing military and civilian special purpose machinery ELBO and EAC (Greek defence systems).

In an e-mail sent on Monday to all relevant ministries, Greece's lenders insist on liquidating the enterprises and dismissing their employees without compensation.

The news has mobilized the government and Prime Minister Antonis Samaras has convened a meeting with representatives of the Ministries of Finance and Defence.

Deputy Minister of Defence Fofi Genimata defines the situation as "very complex" and in her words the Greek government will try to change the lenders’ opinion during the forthcoming monitoring of the country's economy.

According to her, the letter of the Troika states that 144 million euro are required in order for EAC (Greek defence systems) to continue to operate. According to the proposal of the Greek government, the required amount is 30 million euro which will be reimbursed through the utilization of the assets of the enterprise and through the saving of 12 million euro after the completion of a programme allowing 350 staff members to leave on a voluntary basis.

The proposal rejected by the lenders included:

- Recovery measures for all three companies without liquidating them

- Separating the military from the civilian unit

- The programme allowing the staff members to leave on a voluntary basis.

The European Commission presented today its opinion with respect to the three companies. Brussels demands the final decision of Athens regarding the reorganization of LARKO, ELBO and EAC before their privatization or liquidation. The spokesman for Commissioner Olli Rehn states that the recovery of the enterprises should be completed by the end of September as stipulated in the Memorandum of financial support and agreed during the last audit carried out by the representatives of Greece's lenders.

Tags: EconomyState-owned arms companiesELBOLARKOEACPrivatizationLiquidationDimissals
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