Greece and troika clinch long-awaited deal

Greece and troika clinch long-awaited deal

 

By Lefteris Yallouros – Athens

Following talks which lasted more than six months, the Greek government has reached an agreement with troika officials paving the way for the disbursements of the next tranche of the international bailout program to Greece, to be approved at an informal Eurogroup meeting due to take place in Athens on April 1st.

Much of the loan money will cover Greek government debt payments totaling some 9.3 billion euros due in May.

Greek Prime Minister Antonis Samaras announced Tuesday that the two sides shook hands on a long-awaited deal that will see Samaras distribute a large portion of the country’s primary surplus to low income Greeks.

“More than 500 million euros will be given immediately to 1 million Greeks,” the PM said. Low income households and pensioner along with police and army officers on monthly salaries below 1,500 euros will benefit.

Samaras also announced that the state would pay an additional 1 billion euros in debts to suppliers than it had originally budgeted for this year while a further 1 billion euros would go toward reducing the country’s debt.

Furthermore, 20 million euros will be given to help enforce facilities and help to the homeless.

Also, social security contributions would be reduced by 3.9 percentage points, bringing a small rise in incomes for workers and a boost to businesses. Approximately 350 million euros from the surplus will help plug a gap in social security funds.

The “social package” is set to be handed out in May.

Samaras told reporters: “The long negotiations with the troika have been successfully concluded. When others doubted the economy’s achievements or even tried to thwart them, this government, united, went on [with the business of] seriously pursuing its mission, to get the country out of the crisis.”

The creditors now agree that Greece has more than met its budget goals and says no more cuts are needed for the time being. Both sides also agreed that Greece’s primary budget surplus was 812 million euros.

The deal with the troika, however, includes a list of obligations the government is committed to and numerous reforms to make the economy more competitive. Finance Minister Yannis Stournaras described the talks as having been the most difficult in the four years since Greece first sought a bailout.

Greece agreed to adopt 75 percent of the 329 liberalization measures recommended by the Organization for Economic Cooperation and Development (OECD). It is also to lower fines for the late payment of taxes and to continue public sector layoffs in 2015.

Automatic three-year pay rises for new hires should be reduced by 50 percent from 2017.

The policies are expected to be included in an omnibus bill to be put to the parliament in the coming days. A taste of the heated debate that is to follow was given by main opposition party leader Alexis Tsipras who slammed the government for “caving in to the lenders’ demands, which would lead to further job losses and wage cuts”.

SYRIZA leader Tsipras said the deal meant that Samaras would forever be associated with the EU-IMF memorandum.