The men in black are back in Athens. Greece is hosting members of the so-called Troika, representatives from the euro zone, the European Central Bank and the International Monetary Fund, who are there to assess how far the country may have strayed from the terms of its bailout package.
Greek Prime Minister Antonis Samaras will be talking with European Commission President Jose Manuel Barroso today, before sitting down with the Troika tomorrow. The objective is to convince creditors to release the next bundle of cash under the country’s rescue plan, largely with a further 11.5 billion euros of cuts for 2013 and 2014.
The government plans to cut pensions, reduce healthcare spending and renew the emphasis on privatizations, according to Kathimerini. The government yesterday named Takis Athanasopoulos, a former Toyota Motor Corp. executive and chairman and chief executive officer of Public Power Corp., as head of the state asset sales unit. He replaces Costas Mitropoulos, who had been in the job a year and resigned on July 20, citing a lack of support from Samaras’s government and saying it’s “unlikely” more than 300 million euros will be raised this year. The target was to raise 3 billion euros in 2012.
Still, that won’t be the limit of the discussions. Greece may well be seeking some slack to ease the bailout conditions, although the rules governing the package are tight. Any extension to their fiscal adjustment plan would be considered debt restructuring, government spokesman Simos Kedikoglou said yesterday.
More austerity measures in some quarters may allow for more easing in others. The minimum wage was lowered to 585 euros a month in February, and could be cut further, El Pais reports, although Labor Minister Ioannis Vroutsis is opposed to this. More likely are cuts for those who receive the largest state payouts, such as a cap on the highest pensions. And the main issue will be privileges that have accumulated over the years and remain in place. Kathimerini listed some proposed cuts that point again at the complexity of the Greek state benefits system:
“Among the proposals are to limit basic and supplementary pensions to a total of less than 2,400 euros per month, which will save 1.5 billion euros, after the drop in tax revenues is factored in. There are also plans to save 1.5 billion euros from general government spending, which includes stopping pensions for the orphaned, singled or divorced daughters of deceased judges and military officers, which would save 220 million euros, and reducing MPs pensions by 20 percent to save almost 6 million.”