AFP
written by Staff
Monday April 15, 2013
ATHENS — Greece and its troika of international creditors have reached agreement on its economic recovery efforts, opening the way for the disbursement of 8.8 billion euros ($11.5 billion) in bailout loans, officials said Monday.
"The deal was sealed late last night," Prime Minister Antonis Samaras said in a nationally televised address.
"Our society has reached its limits. But finally we are meeting our targets and the (recovery) programme is being improved," Samaras said.
The prime minister said the deal translated into 2.8 billion euros ($3.7 billion) in bailout loans pending since March and "opened the way" for another 6.0 billion scheduled in May.
The loans were suspended by the troika of the European Commission, International Monetary Fund and European Central Bank pending their review of Greek finances and policy.
A joint statement issued by the EU, IMF and ECB said their mission had "reached staff-level agreement with the authorities on the economic and financial policies needed to ensure the programme remains on track to achieve its objectives."
The statement said recent steps taken by the authorities suggest that Greece was likely to achieve its March fiscal targets soon "and hence the disbursement" of 2.8 billion in European loans held from previous round "could be agreed soon by the euro area member states."
The next slice of 6.0 billion euros in loans was originally scheduled for the first quarter of 2013.
The creditor mission said both the Eurogroup of eurozone finance ministers and the IMF would likely formally sign off on the review conducted by their auditors in May, which would clear disbursement of the loans.
The EU and the IMF have committed a total of 240 billion euros in rescue loans to Greece since 2010, with the heavily-indebted country obliged to pursue austerity measures in exchange for the international aid it needs to avoid bankruptcy.
The troika statement said that Greek "fiscal performance is on track to meet the programme targets, and the government is committed to fully implement all agreed fiscal measures for 2013-14 that are not yet in place..."
It said this includes the adoption of legislation to extend collection of the real estate tax through 2013 via the electricity company, an efficient way to collect the new tax but which has provoked ire among Greeks.
Samaras said Athens had also pledged to cut 4,000 state sector jobs this year and 11,000 in 2014.
"The dismissal of 15,000 civil servants is foreseen by the end of 2014, including 4,000 by the end of this year," the prime minister said.
"This concerns employees who have been condemned for crimes or disciplinary offences, those leaving willingly or those whose posts will be eliminated," he added.
Alexis Tsipras, head of the main opposition left-wing Syriza party, called the measure "human sacrifice."
"We will not consent to human sacrifice, to the beheading of civil servants," said Tsipras, whose party has spearheaded opposition to bailout-linked austerity from the start of Greece's rescue in 2010.
The troika statement said one of the mission's main goals, after improving tax collection, was to improve the quality of public services "by streamlining its structures, removing positions, and reallocating staff, and through dismissals" of poorly performing staff.
Privatisation of state assets and liberalisation of product and service markets were also discussed.
The troika said it also examined with Greek officials expanding the social safety net with employment and training programmes funded by the EU and extending unemployment benefits, as well as providing minimum income support and access to primary health care to the uninsured to reduce the burden on low-income households which have been hit hard by the crisis.
The cutbacks and tax hikes that the Greek government has implemented at the behest of the troika have had an immense impact on the Greek economy and society.
Greek GDP has fallen by more than 22 percent overall since 2008 as austerity measures have eroded domestic demand as salaries and pensions have been cut.
Unemployment has shot up to 26 percent of the workforce.
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