Mission chiefs of Greece’s four creditors (European Commission, European Central Bank, European Stability Mechanism and the International Monetary Fund) are currently in the country for a review of Greece’s economy. They met at 11 a.m. with Labor Minister George Katrougalos to discuss pension reforms and are scheduled to meet with a number of other lawmakers throughout the week. The meeting is taking place at the 8th floor of the Hilton Hotel where the creditors are staying and is attended by Finance Minsiter Euclid Tsakalotos and Economy, Infrastructure, Shipping and Tourism Minister George Stathakis.
To secure a positive review Greece must secure legislation to make the social security system viable. Greece has a deadline until March to legislate reforms in social security and tax that would cover up fiscal gaps and problems caused by non-performing “red” loans.
The government is due to present:
– plans on changes to income tax with institutions want main creditors demanding pensions to be given after 20 years of insurance instead of 15 years
– data for pension reforms aimed at economizing 1.8 bln euros with creditors doubting the figures and wanting more cuts. The Ministry of Labor may request reductions to high pensions at 2,000 euros per month. It is believed that creditors will call for a zero clause for pension funds.
– creditors will reject the proposal for an increase of contributions by 1.5 units, stating that it would thwart competitiveness
– proposals for dealing with non-performing “red” loans.
Another meeting between Stathakis and the heads of the institutions has been scheduled for 7 p.m. Tuesday with a particular focus on non-performing loans. It appears that the government and heads of creditors have achieved consensus to extend the current regime prohibiting the sale of these loans until a final agreement is reached.
The heads of the institutions will leave Athens at the end of the week after they have concluded the first phase of the program review. There will be a 7-10 days break until they return for another two weeks. The aim is for the program review to have been completed by the end of February, a government source said.
As Greece’s future is being decided upon, a workers rally is taking place outside the Labor Ministry.
