Troika turns up the pressure on party leaders

Prime Minister Lucas Papademos is set to meet the leaders of the parties in his coalition government on Saturday amid mounting pressure from Greece?s lenders for further structural reforms and austerity measures.

Sources told Kathimerini on Friday that three new demands had been made by the officials representing the European Commission, European Central Bank and the International Monetary Fund – known as the troika.

Visiting officials asked Finance Minister Evangelos Venizelos to include military personnel, employees at public utilities that are to be privatized and teachers among the 150,000 civil servants to be fired by 2015. The troika is also demanding the immediate overhaul of the public administration and evaluation of civil servants.

Greece?s lenders are also asking for a supplementary 2012 budget to be drawn up and passed through Parliament, given that Greece?s economy performed worse than expected last year. The new budget will have to include about 4 billion euros? worth of extra measures that were not in the fiscal plan voted through the House in December. Sources said that the troika has made it clear that if this step is not taken, Greece will not receive in March a loan of 89 billion euros, which will be made up of the remainder of its first bailout and the first installment of the new deal.

The troika has already said that it wants the government to focus less on tax hikes and more on spending cuts, so the 4 billion euros in savings is likely to come from a reduction in expenditure on defense, municipalities and drugs. Health Minister Andreas Loverdos said this week that a ceiling of 2.9 billion euros would be set for public spending on medicines.

The EC, ECB and IMF have also asked for savings on public sector wages by introducing a new salary structure for doctors, military personnel and judges from this year.

All of these issues, as well as the controversial topic of lowering the minimum wage and cutting private sector salaries, will be tabled at Papademos?s meeting with the party leaders.

Sources said the prime minister is determined to reach some kind of conclusion at the end of the meeting. If the party leaders fail to agree, Papademos will ask them to allow him to negotiate with the troika or to include Papandreou, Samaras and Karatzaferis in such talks. Government spokesman Pantelis Kapsis ruled out the possibility of Papademos resigning.