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Troika Tells Greece: Action, Not Talk

The IMF's man in Athens, Poul Thomsen

ATHENS – Official from the Troika of international lenders keeping Greece on economic life support with rescue loans will wrap up a 10-day visit here on Dec. 18 and said they want some firm proposals on demands to further cut the country’s debt before a second bailout of $175 billion can move along, including a deal with investors over a debt write-down as Greek leaders are seeking to eliminate half what it is owed. The European Union-International Monetary Fund-European Central Bank consortium is providing Greece with a first rescue loan package of $152 billion, and said Greece must now move from taxes to more spending cuts, going after tax evaders and privatizing state entities.
The IMF’s mission chief in Athens, Poul Thomsen and a team of auditors have been looking over Greece’s books and were said to have conducted tense talks with interim Prime Minister Lucas Papademos, who is heading a temporary coalition government that includes holdover ministers from the former ruling PASOK Socialists, their bitter rival New Democracy conservatives and the far Right-Wing LAOS party, but infighting has reportedly broken out as the factions jockey for position for elections that were tentatively set for Feb. 19 but now seem certain to be pushed back because so little progress has been made in implementing reforms.
The newspaper Kathimerini reported there was progress in talks with the government, particularly New Democracy, which was said to have accepted more spending cuts after opposing them during the previous 18 months that former prime minister George Papandreou ruled before resigning in the face of relentless protests, riots and strikes. Papademos, who also met with the head of the EU’s task force to Greece, Horst Reichenbach –  reportedly told his Cabinet to support the pay cuts, tax hikes, slashed pensions and layoffs of 30,000 workers for now – and another 120,000 over the next three years.
Reichenbach met with Administrative Reform Minister Dimitris Reppas, who indicated for the first time that the government was willing to consider layoffs in the bloated public sector. Reppas was responding to comments by Thomsen who said authorities should stop regarding layoffs as “taboo” and “start moving more aggressively in closing down redundant state enterprises.” Reppas said the Troika had not proposed public sector layoffs during negotiations but that if they did, “We will discuss it.”
Speculation about a possible government reshuffle to try to stem bickering mounted after reports that the possibility had been raised during meetings between Papademos and the leaders of the three parties in his coalition. Kathimerini said the scenario was proposed by the leader of LAOS, George Karatzaferis, and welcomed by Papandreou, who is still leading PASOK despite burgeoning challenges, while New Democracy head Antonis Samaras, was said to have some reservations but no major objections.
While the political wrangling roared on, Greek workers continued to bear the brunt of the austerity measures that have created a deep recession, with reports that the jobless rate had soared to 17.7 percent and could reach 19.5 percent by 2013. More than 250,000 people have lost their jobs this year, making the jobless rate jump 5.3 percent to near-record highs, according to the Hellenic Statistical Authority (ELSTAT) which reported that in the last 12 months 256,328 people have been let go. The worst-affected sectors were construction, wholesale and retail commerce, manufacturing and agriculture. There are now 878,266 people in a country of fewer than 11 million people without jobs and 500,000 have no income at all, their benefits being exhausted. The government has responded by making workers who still have jobs pay extra taxes to support the unemployed. “They are making us pay for the unemployed they created,” one teacher said bitterly after looking at her pay check that has been cut 30 percent this year while the government has failed to rein in tax evaders costing the country more than $60 billion in lost revenues. Young people still have the biggest problems finding work, with 35.5 percent of those aged between 15 and 29 with no position, while the rate for women is 21.5 percent, while young women have the highest rate, at 40.8 percent.

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