Wednesday is the most important day of the latest Troika evaluation, as today’s talks are to address layoffs from the public sector, the private sector minimum wage and the VAT rate in food.
The troika representatives Matthias Morse, Klaus Masuch and Poul Tomsen will visit Minister of Finances Giannis Stournaras at around 10 am today, to discuss the financial aspect of the reforms and the plans for the departure of 25,000 civil servants.
Mr. Stournaras will explain that 75,000 civil servants have departed in the past 15 months, so the goal of reducing the public sector by 150,000 can be achieved without resorting to layoffs. Negotiations are going to be tough, since “mandatory departures” are a prerequisite for collecting the 2.8 billion euro March installment.
Stournaras to request VAT reduction?
Mr. Stournaras will also test the waters regarding a possible reduction of the VAT of food from 13% to 23%. The Prime Minister will officially make the request when he meets the three Troika representatives on Thursday. This will be the first request to reduce a tax since signing the first memorandum.
Minimum wage readjustment to be discussed
The Troika representatives will meet the Minister of Labor Giannis Vroutsis at 2 pm, in order to discuss determining the minimum daily wage, as well as changes to insurance contributions and adjustments to settling insurance fund debts. According to the third memorandum, the government and Ministry of Labor (rather than social partners) must devise a new mechanism to determine the minimum wage. There is also the chance that the Troika representatives ask that the new minimum wage matches that of Portugal and eastern European countries.
According to recent short Troika reports, Greece has committed to further cutting its health services if EOPYY goes over budget, to readjust DEI’s electricity tariffs in May and deregulate them July, as well as presenting a new tax system in May.
