Problems with labour measures and privatizations

"The negotiations have concluded and no changes will be made," Yannis Stournaras said exiting Maximos Mansion, but a new round of confrontations begins today between government partners and the unions. The finmin’s envoy in Brussels, Panos Tsakloglou, will present the final text of the agreement, but without the political authorization by the coalition parties.

On Monday and Tuesday the Finance minister will hold meetings with representatives of the parties to persuade them to agree to the package of measures that will pave the way for the next loan tranche.

"DIMAR has been involved  in this government from the beginning, many of the conditions it set were accepted by the Troika and it would be a shame to spoil it all in the end," a member of the economic team said.

Stournaras clarified that the Troika will not back off in these three hot issues:

-       cutting the marriage bonus in private sector wages, because the law was implemented by Papademos’ government

-       the non-commitment of businesses to the national collective labour agreement, which provides wage increases for the three-year maturation periods, if they have not co-signed it

-       PASOK's request that all privatizations be decided by the parliament

In the last issue Stournaras appeared assertive, although PASOK threatens to vote against the bill, saying that he believes such a term would drive off any foreign investor that would want to invest in Greece.

Stournaras’ claim that "this is not applied in any country," has created problems for the issue of validity of the conditions of the national collective labour contract.

Reportedly, GSEE is preparing to enter the negotiations dynamically, providing information published by European trade unions in order to reverse the reasoning of the measure.

Citing the Troika, the government argues that the measure will result in the strengthening of trade unions, as unions and workers will augment the ranks of GSEE to be able to get cover under the national collective agreement.

Another arising problem is the recapitalization of banks since, as revealed by Proto Thema, EFSF teams have proposed giving 5.4 billion euros less to the banks in return for tax benefits over time. This issue will be discussed at 1 pm in the meeting between Stournaras and the administration of the Greek Banks Union.

"We are looking into it but do not yet know what the impact on government revenues will be. The general feeling is that due to the great recession, banks may need more money," said a Finance ministry member speaking to protothema.gr on Sunday.

On Wednesday the government will submit to parliament the final draft of the new budget measures of 13.2 billion euros for 2013 - 2014 (which will reach 20 billion euros in four years including the extension).

Finmin associates said that although the Troika provides for zero surplus for 2013, the draft which will come to parliament aims at a surplus of slightly less than 1% of GDP. That means they are abandoning the 1.1% target included in the draft state budget Stournaras presented a month ago.

The whole package of measures will be submitted no later than November 5, whether the government and the parties that support it have reached an agreement or not.