Troika rejects Greek proposal for state-owned defense industries overhaul

A Greek proposal regarding the overhaul of three state-owned companies, Hellenic Defense Systems (EAS), mining company Larco and the Hellenic Vehicle Industry (ELVO), has reportedly been rejected by the debt-stricken country’s partners and creditors, collectively known as the troika.

Media reports cited an email reportedly sent by troika representatives to Greek government officials on Monday. Commenting on the developments on Tuesday, Alternate Defense Minister Fofi Gennimata said the Greek government was preparing its response.

Asked to comment by Kathimerini on Tuesday, EC spokesman Simon O’Connor avoided either confirming or refuting reports that all three companies were due to close.

“The MoU requires – and the last review set this as one of the milestones to be completed for September – the adoption of ‘irreversible decisions by August 2013 on the restructuring, involving substantial downsizing, ahead of privatisation or on the resolution of ELVO, HDS, and LARCO, both in compliance with State aid rules, with a view to implementing these decisions by December-2013.’ Discussions are ongoing with the Greek authorities with regard to the fulfilment of this requirement,” O’Connor said.

The Greek proposal regarding the country’s defense industries was based on a scheme foreseeing liquidation of the companies while they are in operation, a distinction between military and other factories as well as early retirement incentives for staff members.

Finance Ministry sources said that the troika has voiced its concerns regarding the government’s plans but stressed that negotiations were to continue.

The plans regarding the EAS, ELVO and Larco overhaul are a prerequisite for Greece to receive a new, 1-billion-euro tranche of bailout aid scheduled for release in early October.

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