Troika steps up demands

Greece is still hopeful it can conclude by the end of the week an agreement on the 13.5-billion-euro austerity package it is negotiating with the troika despite the fact that its lenders have raised objections to about 3.5 billion euros of spending cuts and tax hikes and are also demanding a raft of structural reforms be implemented before the next loan installment can be approved.

Sources told Kathimerini on Tuesday that representatives of Greece?s creditors raised objections to 1.5 billion euros of spending cuts for next year, mostly from health, defense and reform of local authorities and the public sector. The international lenders have also cast doubt on 2 billion euros? worth of measures for 2014, although these are mostly revenue-raising.

The troika added to the pressure on the Greek government, which was hoping to have passed the package through Parliament in time for the European Union leaders? meeting on October 18, by insisting that a range of structural reforms that fell behind schedule this year due to the two general elections in the summer are implemented as ?prior actions? before Athens could receive any more money.

These reforms include the liberalization of so-called closed professions, the deregulation of goods, services and energy markets, the creation of a new body to manage state procurements and the merging of all health insurance providers with the National Organization for Healthcare Provision (EOPYY).

Labor Minister Yiannis Vroutsis and troika chiefs discussed a planned overhaul of labor laws with talks reportedly touching on such sensitive issues as the minimum wage and the compensation given by firms to dismissed employees. Troika envoys reportedly pressed for a reduction of up to 30 percent in the severance pay but Vroutsis told reporters that ?now is not the appropriate time to raise such an issue.?

The thorny issue of civil servants also came back to the fore as Finance Minister Yannis Stournaras and Administrative Reform Minister Antonis Manitakis reportedly discussed the merging and abolition of around 250 state organizations, an initiative expected to put 20,000 civil servants out of a job. The troika has been pushing hard for layoffs in the civil service, rather than the inclusion of public workers in a so-called labor reserve scheme that would see them receiving a heavily docked wage for two years before their status is reviewed.