Tough talks with troika resume

Rattled by merger freeze, gov’t seeks consensus on civil servants, debts, before summit

Finance Minister Yannis Stournaras is to resume on Tuesday tough negotiations with troika envoys on several contentious issues, including a delayed overhaul of the civil service, in a bid to reach a consensus before Friday’s informal Eurogroup summit in Dublin.

Government and troika officials on Monday took a day off negotiations to prepare their arguments and to allow the dust to settle following the unexpected news of the suspension of a merger between National Bank of Greece and Eurobank. They are to resume talks at 4 p.m. on Tuesday and have a lot of ground to cover if they are to reach an agreement by Friday’s summit. Greece’s economic reform progress will be on the agenda of talks at the summit but a decision on the release of a 2.8-billion-euro loan installment that had been due last month is not expected until later in April while a decision on a subsequent tranche of 6 billion euros is likely in May. Unless the disbursement of the tranches is delayed until after May 20, when Greece must cover 5.6 billion euros in bonds that are set to expire, government officials say there will be no cash-flow problem.

Greek officials have much progress to make before aid is approved. Stournaras admitted that he was not sure negotiations would be over in time for the summit.

But officials said some issues had been resolved. It appears that firms or individuals owing tax or social security contributions will be allowed to pay off their debts in 48 installments rather than the 36 the troika had favored.

It is unclear whether the foreign envoys will show similar understanding when it comes to Greece’s cutbacks in the civil service. The two sides have reportedly agreed that the government will be able to hire a new civil servant for each of the bureaucrats it is forced to fire in coming months. The firings are to start with staff who have been found guilty of disciplinary offenses and continue with those who consistently fail to turn up for work. A scheme for downsizing the public sector, drawn up by Administrative Reform Minister Antonis Manitakis, remains the basis of talks, sources said. But it will be Stournaras, not Manitakis, who will negotiate with the troika, who reportedly want layoffs over and beyond some 4,000 civil servants accused of breaking the code of conduct.