Greece and its international lenders appeared to reach a compromise on Saturday over public sector reforms, which would permit the troika to complete its review of the adjustment program and allow eurozone finance ministers to decide on Monday whether to release another 8.1 billion euros of bailout funding for Athens.
The deal seems to have been clinched after the troika inspectors accepted Administrative Reform Minister Kyriakos Mitsotakis’s plans for completing a labor mobility scheme involving 12,500 civil servants.
However, Mitsotakis had to agree in return that the program would run for eight months rather than 12. It appears that as a result of agreeing to shorten the duration of the scheme, Mitsotakis will be allowed until the end of September to identify all 12,500 public sector workers who will be transferred to other positions. The original deadline had been the end of June.
“It is sealed, there will not be any more meetings regarding the public sector,” Mitsotakis said on Saturday afternoon. “All that is left is for the Eurogroup to give its approval.”
According to sources, 5,000 of those who will be included in the program will be local authority employees, including school crossing guards and cleaners. Some 3,500 municipal police officers will also be added. They will undergo an evaluation and for every one that is transferred to the main police force, another three will be dismissed. Another 2,000 employees are to come from the education sector, while ministry personnel will also be added once the restructuring of government departments is completed.
The two sides also appear to have reached an agreement over a supposed funding gap of about 2 billion euros for this year and next. The Greek government said that it would “claw back” much of the overspending at healthcare provider EOPYY by forcing private clinics that worked with the public organization to accept reduced payments.
There were also reports that the troika agreed to the seasonal reduction of value-added tax in the food service sector from 23 to 13 percent in return for a rise in tax on luxury goods. The government is expected to table in Parliament today a multi-bill containing a number of prior actions agreed with the troika, which will help secure further bailout funding.