Greece, Troika Finally Strike Deal

Seven months after they started negotiations on a long series of unresolved reforms, Greece and its international lenders have reportedly reached a draft agreement after more than a week of non-stop talks.
The deal came too late to be considered by Eurozone finance chiefs who met a day earlier in Brussels, holding up release of a long-delayed nine billion euros ($12.5 billion) installment Greece needs to meet a 10 billion euro ($13.67 billion) bond payment.
No details were released on the terms of the contentious issues although Prime Minister Antonis Samaras was expected to reveal the conditions later in the day on March 18. The talks were spearheaded by Finance Minister Yannis Stournaras.
But the terms reportedly included the release of 500 million euros from an expected 1.5 billion euros ($2.07) less than half the 1.05 billion ($1.46) billion promised by Samaras, for pensioners with the smallest benefits, police, military and emergency service personnel.
Greece had been wrangling with envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) over a number of obstacles, including breaking up professional monopolies, speeding the pace of privatization, more public worker firings, freezing the minimum wage and the primary surplus.
The deal does not contain any new austerity measures, Samaras insisted. “Today a long period of tribulations has ended, and a new beginning is being made,” Samaras said. Stournaras said the text of the agreement was being written up.
Greece has depended on its two bailouts of $325 billion since mid-2010. Payment of the rescue loans depend on the country meeting criteria in spending cuts, tax increases and reforms, and Greece’s progress in meeting the targets is reviewed regularly by the debt inspectors.
Greece began this latest round of negotiations in September. “These were seven very, very difficult months,” Stournaras said.
Apart from the 500 million euros that would be distributed to Greece’s poorest, Samaras said an additional 1 billion euros ($1.39 billion) would go toward paying off the state’s internal debts — for goods and services received from the Greek private sector. That will raise to 2.8 billion euros the amount it will pay off in internal debts in 2014, the AP reported.
Neither he nor Samaras made any mention of public sector firings, or reports the government was under pressure to allow companies to carry out mass sackings. Nor did they refer to contentious market reforms, including a proposal to allow supermarkets to sell non-prescription medication.
Samaras instead outlined a series of relief measures, including 500 million euros ($695 million) to be distributed to help more than 1 million needy Greeks, including security forces personnel on monthly salaries of less than 1,500 euros.
Other measures were cuts in social security contributions for both employers and employees to encourage hiring. Greece’s unemployment stands at 27.5 percent, the highest level in the European Union.
The prime minister also said 20 million euros would be given to services that care for the homeless, while an additional 1 billion euros ($1.39 billion) would go toward paying off the state’s internal debts — for goods and services received from the Greek private sector.
“Of course, the effort continues,” Samaras said. “We will become a modern European economy. A new Greece.”
The austerity measures Greece has announced over a series of years have led to a backlash from labor unions, who have staged repeated strikes in protest.
The deal struck will pave the way for the funds to be released by the end of April, allowing Greece to meet its May obligations, an EU diplomat told the Reuters news agency.