Stournaras and Staikouras’ proposals to the Troika

The two government ministers, Yannis Stournaras and Christos Staikouras, must be feeling the anxiety of the goalkeeper before a penalty shot. . The hours left until they meet Thomsen, Masuch and Morse are few, as the Troika auditors will be at the Finance ministry on Thursday morning and are to meet prime minister Antonis Samaras on Friday. The two ministers are in a difficult spot as they see:
 
-          the markets tumbling and the stock markets sinking, with Athens recording a daily drop of 7%

-          the Europeans returning with harsh statements about possible default in Greece. The German magazine «Der Spiegel» says that "Greece could default in September. The IMF's patience with Greece is coming to an end, while senior executives have made known to the EU leadership that they are no longer willing to allocate additional money to Greece." German minister of the Economy Philip Rösler said that Greece will not make it and will eventually exit the Eurozone

-          that they have yet to find measures of 4 billion euros from expenditure cuts to a total of 11.5 billion euros for 2013-2014
 
Apart from the measures for the next two years and the 3 billion euros in 2012, the Troika want to discuss what has been left behind such as the deregulation of closed professions, promoting bank recapitalization and administrative reform.
 
For this reason the government is attempting to "prevent" negative developments with the announcement of the package to remove and merge about 200 public bodies within the week for the next 40 days. At the same time they are launching the procedure for the Agricultural Bank and Postbank to run the absorption initiatives of the remaining banking schemes by the other major banks, before the announcement of share capital increases and the finalization of the terms of private participation in the recapitalization. All estimates indicate that in the end, despite the initial statement, the Troika will give the green light for the Agricultural Bank which, if all goes as planned, will be divided into active-passive. It is quite possible that in the coming hours the decision will be made to hand over the bank to a large private bank (probably Piraeus). Ministers will present to the following decisions the Troika:
 

-          the selling of companies and public assets beyond those already included in the Privatization Fund

-          the promotion of a multi-bill which will remove the 77 outstanding issues delaying the already planned privatizations

-          merging and eliminating more than 200 organizations by the end of August
 
The government has clarified that the ministries of Labour, Health, Administrative Reform, Interior and Education will be the great reservoir which must save 11.5 billion euros for 2013 - 2014 provided in the memorandum of the second loan agreement.
 
The Center for Planning and Economic Research (KEPE) suggests the following:
 
1.       horizontal cuts in the main pensions of over 1,000 euros from 5% to 10% depending on the amount in order to save 880 million euros, elimination of the 13th and 14th supplementary pensions, cut of double pensions (the second to be cut by 50% and the possible third by 70%), etc.

2.       reducing pharmaceutical expenditure in public hospitals and EOPYY by increasing the use of generic drugs (saving about 500 million euros)

3.       reduction of extra teaching staff in higher education institutions, reduction of the number of deputy teachers and professors and a 90% increase in the hours of permanent teaching staff

4.       enforcement of tuition fees between 200 and 2,000 euros a year for "eternal" and postgraduate students

5.       payment of 50% of the salaries of the clergy to save 92 million euros

6.       elimination of the normalization benefits for police officers, port officers, fire fighters and judicial employees

7.       reduction of subsidies to local governments and political parties to save 380 million euros

8.       postponement of armament programs and cuts in military travel expenses (628.26 million for 2013-14)

9.       cuts to the privileges of MPs (free car only for MPs in the regions, fuel cost cap at 400 euros a month for government vehicles), closure of the parliamentary TV channel and digitization of all transactions with the public sector (to save 369 million euros in four years)

10.   50% reduction in the pensions of former prime ministers, 20% reduction in parliamentary salaries and remuneration of mayors, general secretaries and district commissioners.