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Lenders want guarantees from Samaras

13 March 2013 / 19:03:52  GRReporter
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Victoria Mindova

The layoffs in the public sector, the manner of collection of the property tax and the mastering of outstanding obligations are the main issues that have caused a split between the Greek government and the lenders from Europe. The special mission of the representatives of the supervisory Troika of the International Monetary Fund, the European Central Bank and the European Commission in Athens has been extended by one week in order to find a middle ground for the implementation of the measures under the programme for financial assistance to Greece.

A day before leaving Greece, the heads of the mission requested a meeting with Prime Minister Antonis Samaras in order to resolve the differences between the two parties at a higher level. Initially, Samaras was to meet with the supervisors on Tuesday evening in order to complete another round of the lenders’ mission. The lack of agreement on how to collect the property tax and the refusal of the government to start direct layoffs in the public administration are the main reasons for the failure of the originally scheduled meeting with the Prime Minister. "There are many open issues and therefore, we believe that the negotiations should continue," Finance Minister Yiannis Stournaras told reporters.

The lenders refuse to accept the plan of the Greek government to introduce in 2013 a single property tax, which will bring together the various taxes imposed on property so far. They want the "extra" property tax known as the poll tax to be collected through electricity bills this year too. The Ministry of Finance suggested that it should be separated from the electricity bills and that the tax services should collect it alone. The supervisors, however, do not believe that the Greek tax service is able to effectively do its job and collect the taxes. According to the objectives of the Memorandum of financial assistance, the government should raise 2.5 billion euro from the property tax.

The second issue in the negotiations is the decision on the number of instalments for the settlement of old outstanding obligations of companies and individual persons to the state, which include imposed but unpaid taxes and social security contributions from previous years. The government wants them to reach 60, but the Troika insists that they should not exceed 36. Both sides are expected to reach consensus on this issue and the number of instalments is not expected to exceed 48.

The third issue that remains open is the issue of layoffs in the public sector. Greece's obligation under the contract for financial assistance through which the country has so far received almost 150 billion euro is to cut 150 thousand employees by 2015. The goal for 2013 is for 25 thousand people to leave the public sector. The government insists that it will resort to reshuffles but will not make direct layoffs. The supervisors want the Greek government to explain how it intends to meet its commitments. They urge the Government to make an assessment of the staff in the public administration and to remove those people who do not meet the criteria.

While the government and the lenders are trying to find a common way to continue the implementation of the economic recovery programme, the public workers trade union (ADEDY) has called a general protest in Athens against the layoffs in the public sector. It gathered less than 150 people, mostly leaders of major trade union movements and members of their boards. "The number of public workers in Greece is small and they meet the standards adopted in other European countries. The Troika does not have the right to ask for our layoffs because the country will really sink to the bottom with a small public sector," said the general secretary of ADEDY.

Trade union supporters of the public administration are adamant that the government has no right to dismiss even those officials, who had committed abuses, until all cases are revised. "700 people, who broke their oath, according to the Ministry, are too great a number that does not correspond to the data collected by the government. If public sector employees are defendants in cases related to their personal life they can not be removed from work," insists legal adviser Maria Tsipra.

The trade union organization of the public workers is warning that the meetings and protests in support of the jobs in the public sector will continue. They are urging the general public to support them because the government's measures will hurt ordinary citizens the most. They are adamant that if the cuts take effect, the people will not be able to use even basic public services due to the cuts in the public sector.

Meanwhile, the negotiations between Prime Minister Antonis Samaras and the lenders’ representatives have stalled. Upon leaving the meeting, Finance Minister Yiannis Stournaras said that the two sides were close to consensus, but had not yet reached it. He did not clarify what issues remained unresolved. The supervisors have given the Greek government two weeks to put order in the internal political situation so as to finally complete this part of the negotiations. The representatives of the International Monetary Fund, the European Central Bank and the European Commission are expected to return to Athens in early April this year.


Tags: EconomyMarketsTroikaStrikesNegotiations
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