Greek Finance Minister Gikas Hardouvelis is attending his second Eurogroup meeting in Brussels today. The Eurogroup is scheduled to discuss the progress of the Greek economic program. Last Friday, the Euroworking group gave the “green light” for the release of the first tranche of the loan to Greece, as the six prior actions linked to this tranche were completed.
Right after his return from Brussels, Hardouvelis will have to prepare for his first meeting with the Troika of lenders, who are coming back to Athens on July 8. Their first meeting with Greece’s new Finance Minister is scheduled to take place on Wednesday, July 9.
The Troika auditors will be checking on the implementation of the agreed upon measures which make up the preconditions of the July 1 billion euros installment of the Troika loan.
Among the preconditions of the already received previous tranche which have not yet been fulfilled are 11,500 public employee layoffs, the bill for the open markets, steps against corruption in public administration, steps towards collection of debt to the state and the reduction of pharmacy profits.
The preconditions of the next tranche include the new forest bill, the abolition of many public services and third-party taxes imposed to the private sector, the privatization of part of the Public Power Company (DEI) and the slashing of state funding to political parties.
The issue of court decision on uniformed staff wages is also expected to be raised (how the fiscal gap created will be covered); Greece and the troika will also discuss what the government will do in case there are more court decisions on other special payroll categories (university professors, diplomatic corps employees, doctors). It is no secret that the Troika is worried that the financial gap in Greece’s draft budget will not be covered if similar decisions as the one taken for the compensation of uniformed personnel are taken, as the cost of their compensation reaches 600 million euros.
Alternate Finance Minister Christos Staikouras promised representatives of the police and armed forces that the government will compensate them within this year for the pay cuts they have suffered since August 2012.
Quite a few requirements the government has been delaying, which means the Troika negotiations are expected to be heated, to say the least.
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