Race to convince troika

Greece has just a few days to provide its lenders with finalized plans on a range of reforms, including a unified pay structure in the public sector and a strategy to reduce the number of civil servants, after more protests held up the checks being carried out by the team from the European Commission, the European Central Bank and the International Monetary Fund.

According to sources, the troika officials have decided to extend their stay until Friday as a result of the holdups and after discovering that the reform plans have yet to materialize.

Friday?s talks between government officials and troika representatives were disrupted by a second day of protests at ministries. The inspection team had been due to visit Transport Minister Yiannis Ragousis at his office but access was blocked. There were demonstrations at several other ministries and at the Hellenic Statistical Authority (ELSTAT).

The head of the statistics body, Andreas Georgiou, said the protests were hampering efforts to prepare figures that were due to be sent to the European Union?s statistical agency. ?We will miss tonight?s deadline for sending final updated debt and deficit figures for 2010 to Eurostat because I and my team can?t get into the building to finish the job,? he told the Financial Times.

Although the protests have complicated the government?s task, it appears that PASOK?s failure to finalize plans for an across-the-board civil service pay structure and a scheme to phase out of employment at least 30,000 bureaucrats has left it in a race against time to meet the troika?s demands.

Prime Minister George Papandreou has called another emergency cabinet meeting for Saturday, where ministers will have to rubber-stamp the plan to reduce the number of civil servants. The government is keen to adopt a scheme that will see public sector workers close to retirement age being placed on standby on a reduced salary for at least a year before they can claim their pension. Sources said the troika is unlikely to accept this plan and may call for sackings in the public sector both this year and next.

The government also has to get the troika?s approval for the civil service pay structure it has just drawn up, which will lead to savings of at least 1 billion euros a year. Sources said that three other issues which have to be discussed are the 2012 national budget, a proposed new taxation system and cuts or savings of some 6 billion euros that have to be made in 2013 and 2014.