Four "bets" essential to reach a decision on the extension

DEKO wages, health costs, business contracts and the démarrage for the December 6bil.

A new bargain is starting between Athens – Brussels – Washington on “when and how much” Greece will pay, while EU’s intention to connect the extension with the acceleration of the structural changes in DEKO, labor relationships, health and tax evasion becomes clear.

Until the next European leader summit four burning issues, which are thorns on the side of our lenders, must be solved:

* A “cap” must be placed on DEKO wages, all overtime and bonuses must be diminished, and all managers should be held accountable for the results of their companies. The PM is personally handling this matter and final decisions are soon expected.
* Business contracts must prevail over sectorals and each company should decide its own wages (“luckily” only the EU and not the IMF, is insistent on this).
* Health care costs must slow down.
* 6bil euros must be pocketed in December to end 2010 close to the targets which the government has pledged.

Meanwhile, our lenders have not yet decided whether the extension will apply to the whole amount of 110bil euros or to what we have received so far, nor to its starting date. If it starts from the 1st installment it will end in 2021 and if it starts from the last it will reach 2024 – as the government initially estimated.

In any case, the extension must first be approved by the European Council and then by the parliaments of the member states. But countries like Germany, Austria, Holland and Finland are strongly against the unconditional extension of the Greek loan and ask for specific commitments in order to give the go-ahead.

Issues that deal with the loan rate are also being examined. With this extension Greece will have to repay the loan at a fixed rate of 5,8% or 4,5% variable (like Ireland) instead of a 4% variable or 5,2% fixed as it is today.

It remains unknown whether this regulation will include the 38bil euros our country will receive in 2010, and ultimately the total 110bil, or just the next installments.