The leaders of Greece’s three coalition parties are due to meet with Prime Minister Lucas Papademos on Monday afternoon with the aim of concluding an agreement on further reforms and austerity measures that will secure more funding from the eurozone and the International Monetary Fund.
Papademos held lengthy talks with PASOK’s George Papandreou, New Democracy’s Antonis Samaras and Giorgos Karatzaferis of the Popular Orthodox Rally (LAOS) on Sunday.
Despite speculation that the three leaders would not agree on the measures proposed by the European Commission, European Central Bank and the IMF, Papademos issued a statement indicating that agreement had been reached on the broad outlines of the package.
According to the prime minister’s statement, the leaders concurred on four points:
1) The adoption of measures, in 2012, aiming to reduce public spending by 1.5 percent of GDP.
2) Safeguarding the viability of auxiliary pension funds.
3) Addressing the competitiveness deficit by taking measures including the reduction of wage and non-wage labor costs, aimed to support employment and promote economic activity.
4) The recapitalization of banks through a combination of measures that safeguard public interest and ensure the banks’ managerial autonomy.
Papademos aims to finalize the details on these points during Monday’s meeting. Sources have suggested that on the contentious issue of private sector wage cuts, it is likely that the party leaders will agree to a 20 percent reduced to the minimum wage - currently at 751 euros per month (gross) – and that 13th and 14th monthly salaries will not be cut.
The three leaders briefed party officials on the content of the talks in the early hours of Monday morning. In a letter to Papademos, Papandreou suggested that if agreement is reached, the interim government should remain in place until 2013, rather than holding snap elections in April.
Karatzaferis also seemed open to the idea of the Papademos administration serving a longer term but he insisted that all the PASOK ministers in the Cabinet would have to resign and be replaced by technocrats.
The LAOS leader also suggested that he and Samaras had played a significant role in the troika giving ground on some issues.
“We are in the midst of a tough battle and so far things are developing satisfactorily,” he said. “Mr Samaras and I insisted on some matters.”
The New Democracy leader echoed this view. “This is the first time that there’s been a negotiation [of terms],” he said. “They are asking for more recession, which the country cannot take. I am trying to stop this.”
ND sources suggested that it was Samaras’s intervention that prevented cuts to the 13th and 14th monthly salaries. Finance Ministry sources suggested that this was not accurate.