Greece, Troika Continue Talks in Athens in Bid to Release Funds

Greece’s government goes into a sixth day of talks with international inspectors today on cuts to thousands of state jobs in a bid to clinch a deal that will convince euro area finance ministers to release further aid payments.

“We are close, nothing substantive has changed,” Administration and E-Governance Minister Kyriakos Mitsotakis told reporters in Athens late yesterday after meetings with the so-called troika of officials from the European Central Bank, European Commission and the International Monetary Fund. Discussions on the final details will be held today, he said.

Locked out of markets since 2010, Greece is hoping to secure payment of 8.1 billion euros ($10.4 billion euros) at a meeting of euro area ministers in Brussels on July 8. The loan, part of pledges of 240 billion euros in support from the euro area and IMF, hinges on Prime Minister Antonis Samaras meeting creditor demands for reforms, including cuts to the government’s payroll.

Samaras was last month forced to replace ministers in his cabinet and give coalition partner Pasok a greater role after junior partner Democratic Left withdrew its support. Democratic Left quit the government after Samaras shut down national broadcaster ERT without consultation, firing 2,600 employees, a day after the country failed to draw any bids in its sale of the national gas company Depa SA, which punched a hole in plans to reduce debt through the sale of state assets.

Asset Sales

The troika agreed during the talks in Athens to reduce the target for revenue from state asset sales to 1.6 billion euros this year, state-run Athens News Agency reported, citing an unidentified official from Hellenic Republic Asset Development Fund. The government will need to raise another 1 billion euros next year, with the gas company set to be sold in the first half, ANA said. The troika is due to leave Athens tomorrow, Mitsotakis said.

Greece is aiming to receive approval from the euro area finance minister’s meeting, said a finance ministry official, who asked not to be identified. A law bundling the measures agreed will be submitted to Parliament on the same day as the meeting in Brussels, he said.

Under the agreement with the troika, Greece has to place 12,500 public employees in a so-called mobility program immediately. The staff would be reallocated to new positions or let go after a 12-month period. Another 12,500 public employees will be put on the plan by the end of the year.

The country’s public-sector union called on civil servants in Athens to strike from midday July 8 in response to the plans.

“In a country where unemployment has reached 30 percent, and 60 percent for the young, public services are gradually being abolished while the new measures will promote more unemployment and greater poverty of Greek society,” the Athens-based Adedy labor union said in an e-mailed statement

To contact the reporters on this story: Eleni Chrepa in Athens at echrepa@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net

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