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Greece, Troika Reached Final Labor Agreement, Stournaras Says

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Oct. 24 (Bloomberg) -- Greek Finance Minister Yannis Stournaras said he reached a final deal with the country’s lenders on labor reforms and urged lawmakers to vote for an austerity package required to release bailout loans.

Labor market changes and other “prior actions” demanded by the so-called troika of the European Commission, European Central Bank and International Monetary Fund will be brought to parliament next week, separately from a 13.5 billion-euro ($17.5 billion) package of budget measures for the next two years, Stournaras told reporters in Athens today. The budget measures needed would be 18.5 billion euros without a two-year extension to Greece for meeting its budget targets.

“All the scenarios being worked on with the troika are being worked on with the assumption that there will be an extension,” Stournaras said. “This morning, after an all-night effort, the troika retreated on two basic issues, on severance pay and notice periods,” he told lawmakers earlier in comments televised by state-run Vouli TV.

Prime Minister Antonis Samaras’s race to secure a 31 billion-euro bailout installment primarily aimed at supporting the country’s banks and putting needed liquidity into the economy ran into renewed opposition yesterday from his coalition partners as they balked over demands from the country’s lenders for labor law changes.

Greece has no alternative to relying on bailout loans as it still has an external current-account deficit and is not even self-sufficient in food production, Stournaras said today. The country is trying to create a safe investment climate and state asset sales will boost growth, he said.

Stournaras will brief officials from the euro area on the agreements reached with the troika at meetings on Oct. 26 and Oct. 29, he said.

To contact the reporters on this story: Antonis Galanopoulos in Athens at agalanopoulo@bloomberg.net; Marcus Bensasson in Athens at mbensasson@bloomberg.net

To contact the editors responsible for this story: Maria Petrakis at mpetrakis@bloomberg.net; Craig Stirling at cstirling1@bloomberg.net

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