Troika’s demands for overdue loans and collective layoffs

The negotiations with Greece’s lenders are at a critical point, as Troika is concerned about banks and implements a delaying policy for the new system of regulation of overdue loans.

The Greek side discusses all open issues with the technical teams of the Troika, but the heads seem to have no purpose to come back before the end of February, before reaching an agreement in principle with the Greek government on the overdue loans, the budgetary gap and the structural reforms proposed by the OECD. At the same time, the country’s lenders do not seem to back off regarding the issue of deregulating layoffs, seeking to bring it back on the discussion table.

Banks

Troika has not yet accepted the arrangements for auctions the Greek government has unilaterally implemented, and also awaits its final decision for the permanent mechanism for dealing with borrowers who cannot repay their debts.

For this matter a versatile bargain is in progress "within the walls", as the Greek government's decision will have to be based on a mutual agreement not only with the Troika and the governmental partners (ND and PASOK), but also with banks that want to "collect" overdue loans to reduce their capital needs. From this case the Finance Ministry hopes to find a solution that will allow it to get a part of the bailout package for the banks.

A Development Ministry member said the lenders are “still discussing but have not approved the arrangements” for the settings of debts toward banks.

Yet another problem is the new permanent loan adjustment system. Until next week the Greek government will have to establish the Private Debt Management Council provided for in the same law of December for the loan arrangements. However, two issues that make this deal even more difficult are: Which borrower will be considered as "cooperative" and what would be the minimum acceptable subsistence level?