The government is preparing to agree to fire more than 5,000 civil servants by the end of next year in order to conclude its latest round of negotiations with the troika, Kathimerini understands, as Athens eyes the quick release of its next tranche of bailout funding.
Troika officials left Athens on Thursday after the two sides failed to agree on several issues relating to structural reforms. They are due back at the beginning of April. Greece and its lenders played down the failure to reach a deal.
“We’ve identified quite a number of areas in which reforms have actually exceeded expectations and are delivering important and permanent results,” European Commission spokesperson Simon O’Connor said on Thursday. “Overall the message is quite positive but there is still quite a lot of work to be done.”
The key issues on which Greece and its lenders have yet to agree are the labor reserve for civil servants, the payment of debts to the state, the emergency property tax and a possible fiscal shortfall.
Sources told Kathimerini that the government is willing to offer to fire by the end of next year 5,000 of 25,000 civil servants that will join a mobility scheme this year. The proposal was put to the troika representatives before they left.
With regard to the emergency property tax, which was introduced in 2011 and is levied via electricity bills, the Greek side has not been able to convince visiting technocrats that it has an equally effective method to collect the much-needed revenue. The government wants the unpopular tax to be merged with other property taxes. The troika has suggested that if the coalition can come up with a convincing way to gather the 3 billion euros or so the levy currently brings in, then it would be willing to consider changing the collection method.
Kathimerini understands that the troika has also expressed concern that, based on its projections, Greece’s social security funds will collect 500 million euros less in contributions this year than expected.
The coalition is hoping that it will be able to gain some concessions from the troika as it fears the political damage it could suffer if seen to have failed in negotiations. The government, for instance, is still pushing for value-added tax for restaurants to be reduced from 23 percent to 13 percent.
Securing the next loan tranche of 2.8 billion euros is also seen as vital in avoiding damage to the coalition’s credibility. It is thought that the release of the installment could be approved as early as April 4, when the Euro Working Group meets.
O’Connor said that the disbursement would depend on Greece meeting previously set “milestones” rather than concluding its talks with the troika. He said the tranche “can be disbursed without there being a staff mission.”
Prime Minister Antonis Samaras arrived in Brussels yesterday for an EU leaders’ summit, from where he urged the Union to focus on growth and unemployment, which he labeled Europe’s and Greece’s “number one problem.”