Troika talks to focus on structural reforms

Greece is set to seal an agreement with the troika this week on a 13.5-billion-euro austerity package but the two sides still have ground to cover with respect to structural reforms.

The austerity package contains about 11.5 billion euros in spending cuts and another 2 billion in tax hikes. Kathimerini understands that Athens and the troika will agree on a formula that will see 7.8 billion euros (about 70 percent) of the reductions come from cuts to wages, pensions and welfare benefits.

Negotiations over the next few days are likely to focus on the details of structural reforms demanded by Greece?s lenders.

One of the stumbling blocks last week was the coalition government?s resistance to the troika?s request for compensation for sacked workers to be reduced and for automatic three-year pay rises to employees earning the minimum wage to be scrapped.

Sources told Sunday?s Kathimerini that the government is close to an agreement that would see employees who have been with the same employer for a minimum of 16 years maintain their right for compensation equal to 12 months pay. Athens has yet to agree with the troika on whether compensation should be capped beyond that. A decision over the automatic pay increases is also pending.

In terms of public sector dismissals, the government has proposed that 11,000 civil servants who have committed offenses or have been deemed unproductive be fired. However, it may have to agree to another 3,000 bureaucrats losing their jobs after the merging or closure of public bodies.

On Friday night, the Finance Ministry submitted a bill terminating the services of all the heads of departments at tax offices, customs and at the Financial Crimes Squad (SDOE). New heads will be appointed following an evaluation, as requested by the troika.

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