The Troika is leading Greece to a dead end

After the meeting between representatives of the Troika with the PM, Finance minister Evangelos Venizelos and Labour minister George Koutroumanis on Sunday evening, the three political leaders who support Papademos’ government are now with their backs against the wall. The Troika insists on its demands on four crucial issues: minimum wages, bonuses, continuance and insurance contributions. The political leaders will discuss the new data  with Papademos on Sunday and possibly make decisions, after the latest negotiations that will be completed shortly before their appointment.

During the meeting at Maximos Mansion, the Troika reiterated its original proposal for a 35% weighted average reduction in supplementary pensions and the trimming of lump sums. The explanation provided by the representatives of the lenders was that the Greek government had enough time to negotiate with the leaders of the three parties. Since they didn’t reach a decision, even if they agree with the proposal of Koutroumanis for a 15% reduction and consolidation of Funds - which had been accepted by the Troika, then they would have to implement the original proposal of the lenders.

Regarding minimum wages and bonuses, Koutroumanis insisted that if they are reduced, the government will have to estimate a revenue loss of 1 billion euros from taxation.

Lastly, regarding the issue of social security contributions, they seem to have reached an initial agreement for a decrease of 10%. The decision as to whether to issue terms to businesses still remains to be made. Koutroumanis is promoting contribution reduction forcompanies under three conditions:

a) use of a work card

b) all transactions to be made through the banking system

c) absolute consistency in the reimbursement of contributions

The Troika disagreed with this proposal and asked for the elimination of rules. Papademos’ intervention during the discussion of this issue was decisive in favor of Koutroumanis. The Troika representatives did not insist and referred the matter to the Sunday meeting that will be held at the Labour ministry, where officials will discuss other outstanding issues as well.