The talks between the Greek government and the institutions resumed on Monday, in light of the WikiLeaks revelations and public exchange between Prime Minister Alexis Tsipras and the Fund’s managing director Christine Lagarde.
In an effort to overcome the problems that have emerged and to conclude the bailout review as soon as possible, the government is rumored to be preparing a series of measures, to cover part of the distance with the IMF. These include
Reversing the plan for recruitments in the public sector, so that there is one new recruit for every two who leave the public sector in 2016, one of every three departures in 2017, one for every four departures in 2018 and one for every five departures for 2019.
The aim is to cover the significant needs in education and healthcare, as well as the refugee crisis. The IMF appears unwilling to facilitate the Greek government on this front.
Additionally, the Greek side is considering setting up a privatization fund for the assets of the Armed Forces, which would generate 100 million euro in 2016, 200 million euros in 2017 and 400 million euros in 2018. For every million in revenue from this fund, one million will be written off the National Defense Ministry’s budget.
Again though, the IMF is reluctant to accept this, while demanding a 350 million euro budget cut for the National Defense Ministry. The Fund appears to be concerned over the additional 600 million euros worth of expenses due to the refugee crisis since October 2015.
Finally, the government is examining the prospect of reviewing and merging about 1,800 public sector bodies with centralized services and agencies. This will help reduce payroll costs and streamline the public sector.
