Creditors demand civil service monitor

Draft revision of bailout agreement includes series of interventions such as cuts to retirement lump sums

The draft of the updated bailout agreement that the creditors have sent to the government provides for the strict monitoring of civil service employees and salaries, fresh social security system interventions and an automatic system for the confiscation of assets belonging to those with debts to the state.

Voting on the midterm fiscal plan for the 2017-20 period is among the milestones for the second review of the country’s third bailout, and the creditors insist it must set “limits on salary expenditure and the number of civil servants that are consistent with the achievement of the fiscal targets.” The 2017 budget already provides for savings of 23.8 million euros from the rationalization of the civil service, while further interventions have not been ruled out.

The draft revision of the agreement also foresees new cuts to retirement lump sums, pressure for the completion of the recalculation of all pensions up to the end of 2017, cutting personnel numbers at the new Single Social Security Entity (EFKA), with a big reduction in the number of directors, as well as the cooperation of the tax and social security authorities with a private company for the collection of expired debts.

This proposal has come despite the government’s pledge that the social security issue is closed, and it will make negotiations on the labor reform even more complicated.

It even allows for a delay in the full operation of EFKA (originally scheduled for January 1), saying that all administrative procedures will have to be completed by March 2017.

The draft agreement further dictates the introduction of an automatic system of confiscations for taxpayers with expired debts to the state that will have to start operating from 2017. The creditors insist that the strategic plan for the collection of arrears to the state must be completed by the end of this year, with expired debts having come to 92 billion euros. Any debts that are deemed impossible to collect should be written off, the creditors added.

They are also demanding a deadline of June 2017 for the compulsory use of credit card terminals (POS) by enterprises and self-employed professionals in professions considered high-risk for tax evasion. Another demand concerns the adjustment by June of property prices used for tax purposes, known as “objective values.”