Brussels, 15/04/2013 (Agence Europe) - On Monday 15 April, the Greek authorities and lending body representatives reached an agreement on economic and budgetary measures needed to keep the Greek adjustment programme on the right track. The “troika” (Commission, ECB, IMF) paints a rather positive picture of programme application, which paves the way to payment of a sub-tranche of €2.8 billion.
Negotiations between Greece and donors have been stumbling over the question of how many civil servant posts should be cut. At the weekend, the Greek government put forward a new proposal; 15,000 civil servants will be made redundant by the end of 2014, including 4,000 by the end of this year. According to the Greek prime minister, speaking in a press release, this measure will involve employees “who have been found guilty of criminal or disciplinary offences”. Mr Samaras, however, indicated that for every person made redundant, someone else would be employed in accordance with a process linked to performance. He stated that “this is not about human sacrifice as certain people claim and will involve clear improvements to the public sector”. The terms of the protocol for an agreement with Greece do, however, include cuts to the public sector of 150,000 jobs by 2015. According to Samaras, European structural funds will be released to support the long-term unemployed, particularly through guaranteed minimum wage projects and access to health care for people who have no health insurance.
€16 billion in aid available. Following the positive report by the “troika” at the end of its mission, Greece will shortly receive the €2.8 billion tranche. The €6 billion tranche planned for the first quarter of 2013 will depend on obtaining the approval of the Eurogroup and the IMF for the disbursement of their respective contributions (€4.2 billion from the eurozone and €1.8 billion from the IMF) in May. The Eurogroup will also have to decide whether it will proceed with this payment on a single occasion or whether it will divide it into new sub-tranches that will be paid on the basis of troika recommendations. With regard to recapitalisation of the banking sector, €7.2 billion in bonds have also been available since January but which have not yet been requested by Greece, according to a eurozone source. A troika press release indicated that “these capital buffers will thus ensure the safety and soundness of the banking system and of its deposits”.
At the end of its mission, donors pointed out that the economic outlook is largely unchanged from their previous review, with continued prospects for a gradual return to growth in 2014, after six years of recession. The troika also welcomed the commitment by the Greek authorities to implement the budgetary measures agreed for 2013-2014 and extend the tax on real estate deducted in electricity bills. It also notes that progress has been made in tax collection. According to Poul Thomsen, the IMF's representative at the troika, there is still a lot of work to do in the fight against tax evasion, despite the progress that has been made. Another area highlighted during the Monday morning conference involved the thousands “of bureaucratic obstacles” that need to be corrected in order to improve the country's competitiveness.
Finally, the troika considers that the Greek public debt trajectory remains sustainable. It pointed out that its European partners were committed to taking new “initiatives” and providing additional “assistance” if necessary in order to reduce the Greek debt/GDP ratio once Greece has obtained a primary surplus. This news was welcomed by Samaras, who said that reducing the budgetary burden further would help his country find a way out of the crisis more quickly. (EL/transl.fl)