PM seeks to rally support as troika arrives

Prime Minister Lucas Papademos on Thursday struck a positive note following a joint meeting with the leaders of the three parties in his fragile coalition, declaring that they were all behind the government’s task of pushing through tough reforms, but sources revealed that some reservations had been expressed. Papademos said that “political leaders confirmed their full support for the government,” adding that the process of talks on a debt swap deal and reforms had also been discussed. Sources filled in the gaps, noting that the leaders had been given a “road map” of measures that they are expected to adopt immediately. The document reportedly calls for a discussion on cuts to the 13th and 14th salaries in the private sector, which all three leaders were said to be hesitant about. The possibility of cuts to the minimum wage and holiday pay is expected to figure highly in talks between government officials and top-ranking officials of the European Commission, European Central Bank and International Monetary Fund -- known as the troika -- who are due back in Athens on Friday. Originally, the creditors had wanted an agreement on the private sector involvement -- or PSI -- deal to be in place before talks on a second bailout get under way. But by late on Thursday night there appeared to have been no breakthrough. Finance Minister Evangelos Venizelos, who is to meet with the troika leaders today, told Parliament on Thursday that the IMF had approved a new round of loan talks with Greece.

But, according to sources, the IMF’s executive board only gave its approval after vehement debate, with the strongest objections from Brazil, Russia and India over Greece’s failure to push through reforms. Earlier in the day, the minister said Greece faced a “final battle” for a debt write-down on which its solvency relies.

But it is not only the PSI that the country must clinch. More reforms must be approved, and implemented, for a second bailout to be approved. Parliament made a good start on Thursday, approving a multi-bill foreseeing the opening of various closed professions -- ranging from lawyers to truck drivers -- and the merging of state entities. The truck drivers’ profession will be liberalized from January 27 2012 while the situation with the lawyers remained unresolved.

Lawmakers are to vote again on Tuesday on the bill’s separate articles, with those on wage and social security issues expected to fan the most controversy in the House.


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