Troika returns to the scene of the crime

The new memorandum that the government is discussing with the Troika brings additional measures amounting to 1.2 billion euros and increases of 25% on public transport tickets, OSE and the bills of public utilities. 

Yet another political and economic bargain starts today, as the Troika returns to Athens to check on the implementation of the conditions for the new 130-billion memorandum and consider whether additional measures are needed to meet this year's "black hole" in revenue that so far has placed the deficit off target. 

IIF head Charles Dalara, Commissioner for Regional Development and the man responsible for ESPA, Johannes Hahn, and the head of the Task Force of the European Commission in Greece, Horst Reichenbach, will also be in Athens this week. 

The following measures will reenter the negotiations between the government and the Troika:

  •     decrease of public expenses
  •     new cuts in wage expenses of 800 million euros for 2012 and 450 for 2013
  •     closure of public enterprises and organisations
  •     total implementation of the redundancy measure in the public sector

At least 70.000 public servants will be forced to enter early retirement status in 2012, receiving 60% of their basic salary for one year, while 50.000 will follow in 2013. 

Additional measures for discussion include:

  •     control and cost cutting in the Health sector
  •     effective deregulation of professions
  •     flexibilisation of labor relations
  •     implementaion of new tax burdens

The Troika is calling for an increase of controls on large taxpayers and professionals, while the new tax bill will be designed to eliminate exceptions and exemptions and combat tax evasion through and implementation of total proof of income origin. 

Regarding regulated professions, the interventions so far are described as incomplete and further action is required to release the minimum fees of notaries, reduce the costs for the presence of lawyers, accelerate construction of law firms, repeal the ban on low wages from TEE, while the number and price of taxi licenses will be reconsidered. 

In the context of labor relations, Athens has committed to a tripartite agreement with employers and unions on all aspects of the labor market, while inspections on illegal labour will be run, along with a "business card" pilot plan in 100 companies. 

The health sector measures include:

  •     50% reduction of administrative staff and 5% for doctors of the new Agency for Health Service
  •     10% reduction in hospital costs in 2011 and 5% in 2012.

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