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Troika calls for streamlined EAS, lower social security contributions for employers

Talks between government officials and troika envoys resumed on Tuesday with the foreign inspectors reportedly pressing for a reduction in the level of social security contributions employers are obliged to pay and for the closure or streamlining of the loss-making state firm Hellenic Defense Systems (EAS).

The envoys met first with Finance Minister Yannis Stournaras for talks believed to have touched on the prior actions Athens must complete to clinch the next 1-billion-euro tranche of rescue funding. These include placing thousands of civil servants in a so-called mobility scheme foreseeing transfers and layoffs and the restructuring of EAS and another two state firms, ELVO and Larco. According to sources, troika officials rejected a Greek plan to overhaul EAS, deeming that the company had a weak presence on the international market, and pressed for its closure or for radical streamlining with staff cut down to 341 from 900. In comments to reporters late on Tuesday, Stournaras appeared unmoved, noting that state defense firms should be “export-oriented.”

Talks later in the day between the troika and Labor Minister Yiannis Vroutsis were tense, according to sources, as the foreign envoys reportedly pressed for a reduction – by 3.9 percentage points – of the social security contributions paid by Greek firms for the staff they employ. The measure is part of a bid to lighten the burden on firms. But the government is reluctant to comply, fearing the impact on the country’s social security funds which are already cash-strapped, largely due to many companies not paying social security contributions at all. The proposed reduction would deprive the funds of an estimated 800 million to 1.1 billion euros.

Government officials sought to put negotiations on a positive footing from the outset, presenting data showing tax revenues to be above target. According to figures released by Alternate Finance Minister Christos Staikouras, general government revenues in October came to 4.8 billion euros, 24 percent higher than the target set last month. “The figures are satisfactory enough for us to substantiate a good argument,” a high-ranking Finance Ministry official told Kathimerini. The troika did not respond to the data, however, and is expected to assess it, along with other information presented by ministers on Tuesday, ahead of a second meeting with Stournaras expected on Friday.

The atmosphere in talks at the Finance Ministry was reportedly good on Tuesday despite a protest by ministry employees who have been put in the mobility scheme and who demanded to see Stournaras while he was in talks with the troika. Staff continued the protest in the street, obliging troika envoys to leave via the fire escape. Earlier, police briefly detained a pensioner who threw a handful of coins at Poul Thomsen, the envoy for the International Monetary Fund, as he was entering the ministry. The coins hit the car.

ekathimerini.com , Tuesday November 5, 2013 (21:05)  
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