Talks go down to the wire

Finance Minister Yannis Stournaras and his team continued their grueling talks with the troika over the weekend in a bid to finally hammer out an agreement on a 13.5-billion-euro austerity package ahead of a European Union leaders? summit on Thursday.

Apart from the contents of the painful new package, the two sides also have to agree on a set of so-called prior actions being demanded by the troika. These chiefly comprise structural reforms that have been pledged to foreign creditors but have yet to be implemented, such as the opening up of closed professions and the deregulation of energy and fuel markets. The prior actions also reportedly include an overhaul of the labor sector, including new regulations reducing by 30 percent the amount of compensation employers are obliged to give dismissed staff and the introduction of a six-day working week, as well as new rules for calculating the minimum wage.

It is expected that the troika will insist on 9 billion euros in measures being implemented next year, as opposed to the 7.8 billion euros foreseen in the draft budget, changes that will need to be included in the final budget for 2013, expected to be submitted in Parliament in early November.

According to sources, the troika will seek the signature not only of Stournaras and the coalition leaders but also of the governor of the Bank of Greece, Giorgos Provopoulos. Once Stournaras has the outlines of an agreement with the troika, this will be put to Prime Minister Antonis Samaras and his coalition partners, PASOK leader Evangelos Venizelos and Democratic Left chief Fotis Kouvelis, for approval. The aim is for the PM to go to the EU summit on Thursday with some kind of deal to show his peers.

On Saturday German Chancellor Angela Merkel said she believed Greece had make progress in implementing reforms, albeit less quickly than expected, and that the country should be given some slack. In her weekly podcast, Merkel said Greece?s progress had been slower than hoped for but added, ?On this matter we should always give Greece another chance.? Her comments were interpreted as a shift by Germany toward showing more patience for Greece amid calls from International Monetary Fund chief Christine Lagarde to give Athens two more years to meet targets. German Finance Minister Wolfgang Schaeuble, who said last week no decisions should be taken before the troika issued its report on Greece, on Saturday rebuffed speculations about a rift with the IMF.

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