Brussels, 03/02/2012 (Agence Europe) - The chair of the Eurogroup, Jean-Claude Juncker, announced on Friday 3 February that a meeting of eurozone finance ministers (a Eurogroup meeting) to discuss Greece will not be held on Monday 6 February, but might take place later in the same week. The tough talks on the second Greek bailout are close to conclusion and the Greek prime minister, Lucas Papademos, said on Friday that they were in the final straits.
Two areas are being negotiated at the same time - voluntary private sector involvement to write down the Greek debt to 120% of GDP (from the current 160%); and structural reforms to which the Greek government must agree in order to meet its budget and macroeconomic pledges - a precondition for receiving the second Greek bailout of at least €130 billion (see EUROPE 10545). The Eurogroup wants the main political parties in the country to sign an agreement to back the new reforms to ensure that they are properly implemented no matter which party wins the elections in a few months' time. This call for a written promise is not going down well.
The structural measures currently under negotiation between the Greek government and the troika of lenders (the European Commission, the ECB and the IMF) include pay reform in the private sector, and dealing with chronic problems in the Greek economy by reforming labour market legislation and pay agreements, which a spokesperson for EU Commissioner for the Euro Olli Rehn said were highly pertinent measures. The Commission has taken note of an agreement reached in Athens on Thursday by employers and trade unions, which agreed to unite to protect the minimum wage and payment of the Greek two month-bonus system, explains Athens News Agency. The employers' organisation and the Greek trade union confederation also agreed to cut the cost of welfare payments, but oppose the suggested two or three-year pay freeze and are calling on the troika, the Greek government and the Greek political parties to promise in writing to respect these agreements.
The German economy minister, Liberal Philipp Rösler, rejected any idea of the ECB agreeing to a write-down on the €40 billion of Greek bonds it owns. He said that the current talks were first and foremost on private sector involvement and European states and taxpayers are already contributing massively to the Greek restructuring through the aid they are providing. Rehn's spokesperson said all the details about private sector involvement would be needed before it would be possible to see whether it made Greece's debt affordable and therefore whether further public sector aid would be required. Until such details were forthcoming, there was no point considering other options. (MB/transl.fl)