Deal with troika imminent
Details of the midterm fiscal plan and privatization program due tonight or tomorrow morning
The government and visiting officials of the European Commission, European Central Bank and the International Monetary Fund – collectively known as the troika – have made significant progress in ongoing talks and are expected to finalize the details of the government’s midterm fiscal plan and privatization program by tonight or tomorrow morning.
Sources close to Prime Minister George Papandreou told Kathimerini that talks will have been completed by tomorrow morning when the premier and Finance Minister Giorgos Papaconstantinou are to start a marathon briefing of PASOK MPs and cabinet members.
Reports that the government reached an agreement with troika officials to lower the top rate of value-added tax to 20 percent from 23 percent – chiefly as a concession to the main conservative opposition New Democracy – were not confirmed. The troika has been pushing the government to seek a broad political consensus in order to ease the implementa- tion of a new raft of austerity measures.
In a bid to reassure the country’s foreign creditors, and financial markets, the government is expected to take a decisive stance on cutting state spending, with Deputy Prime Minister Theodoros Pangalos due to chair a discussion on the planned merging and abolition of dozens of state bodies today. Among the bodies expected to be merged are the three state construction firms responsible for school, hospital and prison infrastructure.
Dozens more bodies with vague or obsolete functions are to be abolished. Those remaining operational will be forced to sack 50 percent of workers on short-term contracts. This provision is expected to apply to state broadcaster ERT.
The measures announced in Athens will be the focus of an emergency summit on Monday in Brussels where European finance ministers are to decide whether to release of a fifth tranche of funding, estimated at 12 billion euros, and further loans.