By T. Tsiros
The first round of negotiations between institutional creditors’ representatives and the Greek government conclude on Thursday – as Friday is a national holiday in the country – with labor sector liberalization, fiscal policies and NPLs dominating talks.
Afternoon negotiations will reportedly record the pending issues, which are numerous, with a new round of negotiations towards completing a second review of the Greek program (third bailout) set to resume on Nov. 10, and with the prospect of closing no later than Nov. 25.
The date is significant, given that a EuroWorking Group meeting will convene on Nov. 25, ahead of a Eurogroup meeting on Dec. 5.
No less than 40 “milestones” – prior actions – are now required from the embattled Tsipras government in order to complete the second review, ranging from relatively simple measures to structural reforms entailing genuine political costs for the leftist administration.
The main points now separating both sides, and where creditors continue to raise objections, include:
- Restoration the framework for collective bargaining, with creditors “bumping” the prospect for after the third review of the Greek program, essentially after August 2018.
- The regime concerning mass lay-offs, as well as unilateral recourse to arbitration. Creditors want a liberalization of the framework and elimination of the relevant labor minister’s veto power over mass lay-offs, even in instances when companies face restructuring or closure.
- Non-performing loans (NPLs) and the prospect for out-of-court settlement, with creditors only acquiescing to SMEs and self-employed professionals as eligible for the proposed process.
- A minimum guaranteed income welfare plan, with creditors disagreeing over Athens’ funding schemes for the latter, with estimates pointing to 530 million euros needed on an annual basis just for partial implementation.
- The “quartet’s” insistence on a very high (80 percent) tax rate for disclosed untaxed income by Greek citizens, a prospect that the Greek government rightly points out will lead to an absolute failure. Athens has proposed tax/penalty rates of between 50 to 60 percent.
- The idea of a special bank account for businesses and companies that will enjoy partial immunity from seizure and confiscation by creditors, including state-run entities. The impasse has also blocked the tabling of a draft bill foreseeing incentives for the use of electronic transactions.
- Projections for public sector hirings in the 2017 state budget, particularly in light of the revised, downward, figures for the 2015 primary budget surplus by the Greek statistical bureau, EL.STAT.
- Revising the regime governing special salary scales in the public sector, which affects roughly 190,000 people, such as judges, military officers, physicians etc.
