Troika’s demands for civil service sackings places strain on Greek coalition

The cohesion of Greece’s three-party government is set to be put to the test over the next few days as a second consecutive day of inconclusive talks with the troika ended with Administrative Reform Minister Antonis Manitakis considering his future in the administration due to the lenders’ demands over civil service sackings.

Troika representatives met Finance Minister Yannis Stournaras for lengthy talks on Friday as several issues remained unresolved. Without an agreement, Greece cannot secure its next loan tranches of 2.8 billion and 6 billion euros.

The visiting inspectors are insisting that at least 7,000 public sector workers are fired by the end of next year.

This position has angered Manitakis, who insists that a mobility scheme can help reduce civil servant numbers without the government having to resort to firing bureaucrats on the spot. It has also caused friction between the minister and Stournaras, who incurred the wrath of Democratic Left, the junior coalition partner who nominated Manitakis, over the government’s position on property tax.

“If the problem for the disbursement of the next 8 billion euros is the Administrative Reform Ministry, then Antonis Manitakis has no objection to turning over control of the ministry to Mr Stournaras so he can sign off on what the troika is demanding,” a close aide of Manitakis told Kathimerini.

It appears that Manitakis is also upset that he has not been consulted over the content of negotiations with the troika and has informed Democratic Left leader Fotis Kouvelis that he is prepared to quit.

The dispute leaves Prime Minister Antonis Samaras with plenty of patching up to do over the next couple of days if his coalition is to avoid a serious setback. Samaras is due to meet the troika tomorrow morning in a bid to break the deadlock in negotiations.

Beyond the issue of job losses in the civil service, there are also obstacles to overcome regarding the planned merger of National Bank and Eurobank, property taxation, the tax collection system, payment in installments for debtors to the state and the government’s aim of reducing value-added tax for restaurants.