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The videoconference with the Troika turned into a marathon

20 September 2011 / 13:09:26  GRReporter
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The videoconference of the Greek Minister of Finance Evangelos Venizelos with the supervisory Troika of the International Monetary Fund, the European Central Bank and the European Commission will have a second round after in Monday evening the parties did not agree on the mix of policies that will reduce the deficit of the troubled country. Government sources defined the first conference for the week as an important and effective, but very unsatisfactory too because a second one is expected soon.

The Troika made it clear that Europe and the International Monetary Fund will do anything to keep Greece in the euro zone, but the government should trigger the hard reforms immediately. As infection not treated in time, the Greek economic crisis spread so much that many analysts believe it is already too late for the rescue plan under the Memorandum. Even if the measures planned in the austerity plan are implemented in full, the recession is so deep (5.6%) that the Socialists will not be able to reduce the deficit by about 10% of GDP to 7.5% of GDP by the end of 2011. However, the support funding depends on reaching this goal.

The Ministry of Finance has not opened its cards to the public yet and has not announced exactly what measures will be taken to make up for the lost time. However, under the austerity plan, the first cuts will come in the public sector and public administration. These measures will be effective with more than a year delay and cost billions of euros to the Greek budget and ordinary taxpayers.

Firstly, the unified method of calculation of the public sector wages has to be introduced finally. It will also reduce their monthly values ​​to more reasonable levels. There are rumours in the public space for cancelling the pensions of young retired in Greece under the age of 55 and reducing the pension funds administered by the navy and civilian farmers’ funds. Pensions in the civil fleet (NAT) are relatively high, compared with average pensions in other sectors, but the familiar claim that this is the most stable fund in the country with some of the highest contributions. Just for this reason, the state has used for years the funds for other purposes and that is why the sailors’ pension fund is almost empty today.

The "labour reserve" phenomenon also astonished the Troika. The Greek government will have to reconsider its plans for including 30,000 people in the program of compulsory paid leave during which unnecessary public sector employees will receive 60% of their monthly salary without going to work. If the socialist government would like the measure of the labour reserve to have a real influence on reducing spending, it should be applied for at least 100,000 workers in the public administration and public enterprises. Otherwise, the solution remains the specific redundancies, which will burden the statistical data on unemployment and worsen the problems in social security.

Moreover, the government should immediately terminate the temporary contracts in the public sector that are most popular in the education sector. According to the austerity plan, the excise duties on oil for heating and fuel oil are expected to become equal by early October this year. The cuts of government funding to the National Post come next and the immediate reform of about 65 public enterprises and organizations. Reform in this case means their closure or merger with other companies.

 

Tags: EconomyMarketsTroikaSupervisionGreeceReformsVideoconferenceMeasures
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