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Troika Loan on Hold, Xmas Bonus, Pensions at Risk

Greek Labor Minister Giorgos Koutroumanis says the holidays could be bleak for many Greeks without more foreign aid

ATHENS – Greece’s interim Prime Minister Lucas Papademos, who is overseeing a shaky coalition of three parties, is trying to persuade international lenders to release a delayed $11 billion loan installment, without which the country will not be able to give workers even a reduced Christmas bonus, nor pay pensioners in January, Labor Minister Giorgos Koutroumanis said. Papademos met in Brussels with European Commission President Jose Manuel Barroso, who reportedly told him that, the Troika of the European Union-International Monetary Fund-European Central Bank is working on a second bailout of $175 billion to supplement a first rescue package of $152 billion. But the pending $11 billion installment is being kept back until a deal can be worked out with the coalition government, amid contradictory reports that the Troika wants a written guarantee, or may not.
The apparent bugaboo is whether  New Democracy leader Antonis Samaras and LAOS party leader George Karatzaferis will sign the loan. Samaras has refused, insisting the banks should accept his word and not insult the country’s dignity by asking for a written guarantee. Their two parties have joined with the former ruling PASOK Socialist Administration to hold power until elections are held in February. Papademos is charged with keeping the loans coming and the fractious coalition together even as the parties keep jockeying for power and try to position themselves for the next election.
Asked about the guarantees, Papademos appeared unwilling to discuss the issue in detail, saying instead that the parties in Greece’s unity government have achieved consensus and that the government itself will be providing all the guarantees necessary for the release of the loan installment. “This letter by the leaders of the parties supporting the government, as been requested by the Eurogroup and the IMF… it is necessary in order to eliminate uncertainties and ambiguities concerning actions to be taken in the future, by parties that may be in power,” Papademos said in a statement that was far from clear. “But it’s up to the leaders of the relevant parties to decide how this confirmation of the commitment will be made.”
He added: “I think we should all realize that our European partners and the IMF are committing themselves to the financing of Greece over a long period of time. And this is the reason why they are expecting a corresponding commitment, not only by this government, but also by the political leaders of the parties that support it, on their continued support and commitment to these policies over the medium and long term.”
While the newspaper Kathimerini earlier reported the Troika had backed down to Samaras,  Amadeu Altafaj, spokesman for the European Union Economic and Monetary Affairs Commissioner Olli Rehn, told reporters in Brussels that was not the case. “A clear and unequivocal commitment in writing by the political forces in Greece” for the loan and the accompanying pay cuts, tax hikes, slashed pensions and scores of thousands of layoffs,  he added. “At this stage, we don’t have it,” he was quoted by Bloomberg news agency as saying.
Without the loan, Greece could even forfeit its place in the Eurozone of the 17 countries using the euro as a currency as well as be unable to pay workers or pensioners.
Koutroumanis said further reductions may also be coming without the aid, perhaps as much as 50 percent, presenting a potentially catastrophic Christmas for Greek merchants, some 100,000 of whom have already closed as the austerity measures have created a deep recession of 18.4 percent unemployment as many Greeks have nearly ceased spending.
He also said that the simultaneous payment of salaries, social security benefits and income tax will begin on March 1, adding that the so-called “work card,” or an electronic record of payments, will also go into effect on the same date and that businesses using the electronic system may be given a break on social security payments by up to 10 percent. He said that social security benefits are too high for many businesses and that the ministry is planning some reductions, especially in sectors that can generate employment.

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