NEWS

PM set to present fiscal plan on Friday

Greece and a team of inspectors from the European Commission, the European Central Bank and the International Monetary Fund looks set to conclude talks on a medium-term fiscal plan by Friday when Prime Minister George Papandreou is set to discuss its main points with Eurogroup chairman Jean-Claude Juncker.

A senior government official told Reuters on Thursday that Athens had agreed to 6.4 billion euros in new budget steps for 2011, including tax hikes and lower income tax exemptions.

“The prime minister will present the main points of the mid-term plan to Juncker, which include speedier privatizations and new measures to cut government spending and raise revenues,» the official, who did not want to be named, said.

Papandreou will meet Juncker in Luxembourg on Friday afternoon. They will discuss the EU/IMF inspectors’ review of Greece’s progress on its fiscal consolidation and privatization path and a series of other issues regarding the debt-choked country.

A new package for Greece, expected to total around 65 billion euros could involve a mixture of collateralized loans from the EU and IMF, and additional revenue measures. It could involve unprecedented intrusive external supervision of the privatization program.

Sources told Kathimerini that talks in Athens between government officials and visiting envoys had stumbled on a dispute over collective labor contracts. Labor Minister Louka Katseli reportedly objected to the officials? demand that employers who do not sign up to collective labor contracts should not be bound by their terms. Katseli is said to have the backing of Prime Minister George Papandreou on this issue.

One point on which the government and its creditors were said to see eye-to-eye was on an ambitious privatization program, agreeing to bring forward several sell-offs planned for 2012 to this year and launching those slated for 2014 and 2015 by the end of next year.

The new plan reportedly foresees the state selling a 21 percent stake in Athens International Airport (currently 55 percent state-owned) as well as its entire 34 percent stake in Hellenic Postbank and 40 percent of its 74 percent stake in the Thessaloniki Water Supply and Sewerage Company (EYATH).

The only privatization project actually under way is the sale of a further stake in OTE telecom.