New cabinet faces grueling month ahead
Talks loom on budget, labor laws, selloffs
With his new cabinet in place, Prime Minister Alexis Tsipras is this week expected to urge his ministers to move swiftly forward with economic reforms so that Greece and its European partners can launch talks on debt relief and he can signal that the country is turning the corner.
The cabinet was sworn in over the weekend with a few new faces, to indicate a revamp, and the sidelining of some ministers that had expressed opposition to privatizations demanded by Greece’s creditors.
In comments on Saturday, Tsipras sought to give an upbeat message, saying the new administration could give “the necessary push, so we can cover the last crucial meters of a marathon” and that growth was on the horizon.
The pressure is mounting for the government to implement reforms linked to the country’s third bailout before the end of the year. Authorities aim to sign off on 93 prior actions by December 5, the last scheduled meeting of eurozone finance ministers of the year. That would mean enforcing three or four measures a day.
In addition, the government must finalize the national budget for next year and the mid-term program for 2017-2020. A key problem is that Greece’s creditors anticipate a budget gap for next year as they are not convinced authorities can find the revenues to finance social welfare benefits they have heralded for 2017.
Other big challenges Tsipras’s new ministers face when representatives of Greece’s international creditors return to Athens next week are talks about changes to labor laws and privatizations. Tsipras is keen to avoid making concessions on workers’ rights as foreign auditors are pushing for an easing of legislation to make mass firings easier and strikes harder. Privatizations are expected to be less of a minefield now that Giorgos Stathakis and Dimitris Papadimitriou, both low-key officials, have assumed the key posts of energy minister and economy minister respectively.
There are also hopes for Effie Achtsioglou, the 31-year-old aide to Giorgos Katrougalos who replaced him as Labor and Social Insurance Minister and is said to have a good relationship with foreign auditors.
According to sources, Greece’s creditors are prepared for the possibility that the bailout review could run into January or even February. But Greek officials are keen to avoid such an eventuality, fearing that creditors could insist on additional actions before talks on debt relief can begin.