NEWS

Talks on loans progress as debt clock ticks

Talks between the government and representatives of the International Monetary Fund, the European Union and the European Central Bank are progressing well, Finance Minister Giorgos Papaconstantinou said yesterday, as he emphasized that an agreement must be reached soon on the 45-billion-euro emergency loans for Greece so it can meet its debt commitments later this month. Upon returning from Washington, where he attended an IMF meeting, Papaconstantinou briefed Prime Minister George Papandreou and then spoke to journalists about the course of negotiations. «There has been good progress,» he said. «We hope that they are concluded soon, so that we can have a three-year borrowing and economic policy framework.» When addressing a parliamentary committee later in the day, the minister said that it was vital that some loan money be in place before May 19 when a 9-million-euro Greek government bond matures. A little earlier, German Chancellor Angela Merkel suggested that Greece would have to adopt more austerity measures to qualify for the loans from its eurozone partners. Papaconstantinou refused to rule out the possibility that wages would be cut in the private as well as public sector. «There is an ongoing discussion,» he said. «We have said that the issue of the country’s competitiveness does not have to do with wages, which, as we all know, are low but with structural matters and prices.» Sources said the Finance Ministry is due to reply this week to the IMF’s queries about possible reform of labor laws which have been in place since 1990. It is thought that the IMF, and EU, officials are asking for the 13th and 14th monthly salaries to private and public workers to be scrapped and for it to become easier and less costly for businesses to sack their employees. The possibility of changes to salaries and workers’ rights in the private sector has begun to stir union reaction. Greece’s main private sector union, GSEE, is due today to call a 24-hour nationwide strike for May 5. Its representatives failed yesterday to attend a meeting with Labor Minister Andreas Loverdos, mainly to discuss pension reforms, as only the PASOK-affiliated faction agreed to go to the talks. Loverdos hit out at the other factions, particularly that affiliated with main opposition New Democracy.