The government’s negotiations with the troika representatives have stalled, after closer scrutiny of matters handled by the Ministry of Labor has revealed a number of issues. The Thursday meeting between Minister of Labor Yannis Vroutsis and the troika representatives lasted about five minutes, after the Minister began referring to political arguments. As a result, the Friday morning meeting at the Ministry of Labor has also been cancelled.
The issues that appear to have caused this dramatic turn of events are the debts of insurance funds and the activation of the committee that is expected to promote changes in the insurance system. Officers from the Ministry maintain that the government is not planning to impose an emergency levy on business turnovers or profits, claiming that such a measure would be counter-productive in terms of a growth strategy.
Based on the limited response to settlement of debts towards insurance funds, the Greek side is expected to suggest alternatives, such as increasing the number of installments or transferring over debt from 2013 to 2014. The Ministry will discuss the gradual reduction of insurance contribution by 3.9% next year and developing a new way of calculating lump sums paid out upon retirement. The negotiations will include policies to support the more vulnerable classes and the implementation of measures such as the “minimum guaranteed income”.
Changes to mass dismissal policies
Aside from the increase of dismissal limits and procedures, there are no outstanding issues to discuss with the troika. The Ministry of Labor is waiting for the completion of a study on the best relevant practices in EU before further discussing dismissals.
Commissioner Olli Rehn confirmed that a discussion on the reform of mass dismissals will take place, as part of the Greek recovery program. According to Mr. Rehn the goal of changes will be to attract investments and create new jobs, by aligning Greek policies with European standards.
