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Troika: Social Security Bill Won’t Cover the Fiscal Gap

troika, social securityAccording to European sources, the cut on social security expenses will not totally cover the fiscal gap of the next year. It seems that Troika and the Greek government have different opinions on the needed austerity measures for the following year.
On Tuesday or Wednesday the Greek government was scheduled to submit a new draft law to Parliament. The bill aims to limit the evasion of social security contributions. Also, the government wants to implement a unified public sector wage structure and some austerity measures which will give 500 million Euros toward next year’s savings. However, the Troika seems to have a different opinion. According to Troika, the fiscal gap will be at around 2 billion Euros. Troika also stated that the new law won’t result in the projected savings and these savings will not cover the fiscal gap.
Greece and Troika seem to disagree on next year’s projected revenues and on the predictions for welfare expenditure. Our lenders support that the social expenses for the next year will be higher than we expect because of the unemployment and the inability of firms to pay social security contributions. Furthermore, Troika doesn’t accept the projections of Greece for tax revenues. Greece supports that we will have an extra income after the improvement in tax collection and the further clampdown on evasion.
On their meeting next week, Troika will check if we are close to reaching the “milestones” which we have agreed to in order to secure the next bailout tranche of 1 billion Euros. These measures also include the mobility of 12,500 civil servants. According to the Administrative Reform Minister Kyriakos Mitsotakis, we will meet this commitment next week. He also mentioned that Greece seeks to dismiss another 1,270 employees. However, Troika maybe won’t approve the government’s calculations because 230 dismissals relate to public sector workers fired because they break the code of conduct. In addition, another 500 are employees who quit because of poor health.

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