Greece’s international lenders have left Athens after talks failed to agree on instituting new reforms, but the government reportedly is preparing to fire more than 5,000 civil servants by the end of next year to keep critical rescue monies coming, the newspaper Kathimerini reported.
Officials of the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) are scheduled to return on April, but the delay has pushed back a 2.8 billion euros ($3.6 billion) loan installment due this month.
The government downplayed the failure to reach a deal and said substantial progress had been made in some areas as it was pressing for the release of 25,000 workers this year and 150,000 over the next three years.
Greece has hundreds of thousands of needless workers who were hired for generations by the New Democracy Conservatives and PASOK Socialists in return for votes and drain the economy.
“We’ve identified quite a number of areas in which reforms have actually exceeded expectations and are delivering important and permanent results,” European Commission spokesperson Simon O’Connor said. “Overall the message is quite positive but there is still quite a lot of work to be done.”
Talks between Troika envoys and Prime Minister Antonis Samaras ended before agreement could be reached in all areas of concern between the parties but he was said to be reluctant to let go public workers which are the main constituency of his party and one of his coalition partners, the PASOK Socialists.
The key issues on which Greece and its lenders have yet to agree are the firing of public workers has none have been let go despite three years of prodding and as pay cuts, tax hikes and slashed pensions have pushed the unemployment rate in the private sector to 26 percent. There are still disagreements over how the state could collect overdue debt, continuation of a 100 percent property tax surcharge and other measures needed to hit fiscal targets.
The government has said it can’t convince the Troika that the property tax surcharge put into electricity bills under threat of having power turned off should be merged with the regular property tax bill, effectively doubling the tax for good. The Troika has suggested that if the coalition government can come up with a convincing way to gather the 3 billion euros or so the levy currently brings in, then it would be willing to consider changing the collection method.
Troika officials were also said to be concerned that the county’s social security funds will bring in 500 million euros ($653 million) less this year than expected amid reports that many companies continue to defraud the government by collecting the monies from workers paychecks and keep them instead of forwarding them as required.
The coalition is hoping that it will be able to gain some concessions from the Troika as it fears the political damage it could suffer if seen to have failed in negotiations. The government, for instance, is still pushing for Value Added Tax (VAT) for restaurants to be reduced from 23 percent to 13 percent.
O’Connor said that the loan release would depend on Greece meeting previously set “milestones” rather than concluding its talks with the Troika. He said the tranche “can be disbursed without there being a staff mission.”