Troika Breaks Off Budget Talks With Greece

IMF envoy Poul Thomsen isn’t talking for now

Greece’s negotiations with international lenders hit another snag on Oct. 16 when the envoy of the International Monetary Fund (IMF) broke off talks and said he had to brief the agency’s chief, Christine Lagarde on the lack of progress.

The abrupt departure of Poul Thomsen, the head of a team that also includes representatives from the European Union and European Central Bank in the so-called (EU-IMF-ECB) Troika, postponed the talks, dashing Prime Minister Antonis Samaras’ hopes of reaching a deal on $17.45 billion in spending cuts and tax hikes before an Oct. 18 meeting of EU leaders.

Thomsen was meeting with Labor Minister Yiannis Vroutsis when he announced that talks over public sector reform would have to be postponed so he could brief the IMF chief. His departure was followed by that of EU envoy Matthias Mors and the ECB’s representative Klaus Mazuch.

Sources told the newspaper Kathimerini, however, that the Troika walked out after talks broke down over the government’s refusal to reform the pay structure for public workers that included the lenders demands to fire 150,000 workers by 2015, reduce severance pay drastically and reduce the time of notice before firings, and require a six-day work week.

Samaras had said he was hopeful of being able to present a deal – although it still would have to rubber-stamped by the Parliament his uneasy coalition government controls. The break-off of talks puts a crimp in Samaras’ hopes of getting the Troika to quickly release a $38.8 billion installment, the last in a first series of $152 billion in rescue loans. A second bailout, for $172 billion, is also on hold until Samaras’ uneasy coalition gets the sign-off from the Troika for more austerity measures.

Greece has depended on bailouts since losing access to bond markets in 2010. The cash payments are conditional on Athens sticking to a strict debt reduction program, but without the rescue monies, Greece will be unable to pay its workers and pensioners and could face being forced out of the Eurozone of the 17 countries using the euro as a currency and fall into catastrophe.

It remained unclear when Samaras would meet with his coalition partners, Socialist PASOK chief Evangelos Venizelos and Democratic Left chief Fotis Kouvelis, to sign off a new package that includes more of the pay cuts, tax hikes and slashed pensions all three had vowed to resist before the June 17 elections, but since have reneged on. Also holding up the talks is the government’s refusal to open so-called closed professions, such as lawyers, architects, engineers and others who enjoy near-monopolies and guaranteed profits.

The government wants unneeded workers or those without a position after the merger of redundant state agencies to be suspended and prohibit firings, except for those who have been disciplined for workplace violations. Under the Greek Constitution, however, workers cannot be fired for virtually any reason, including incompetence or wrongdoing.


  1. Pay cuts will be necessary but six day work week is unacceptable. The country the person who is requesting this doesn’t haven’t have this policy so why is he shamefully asking it of Greeks? I support austerity but nothing that influences time people with their families.

    Raising taxes even more is ridiculous. It makes our economy less competitive and just encourages further tax evasion. We should be going after tax cheats not raising taxes on our honest people to make up for shortfall,

    I agree professions should be opened up to competition and government will need to be further downsized but living standards should also accurately reflect our level of private production. No more or less austarity measures would be fair. With the next round of austerity it will achieve that  (since there has been a dramatic drop of living standards these last few years). Any more cuts after that is unfair and cruelty.

  2. When Troika officials make ridiculous requests like a six day work week and very high taxes it’s like they are intentionally making such absurd requests to make Greeks refuse so they can later say “oh Greeks didn’t meet their commitments”….so as they can wash their hands of us.

    What still  needs to happen is a further drop in government spending and pay cuts to reflect our national output. This is fair of Troika to ask for since we are the ones that created this mess and they are the ones that are paying for our mistakes.

    However this does not include a complete dismantling of all workers rights to third world status either.  If that minimum level of government service is meet (which similarly exists in other EU countries even the poorer ones) and there are still in shortfalls after that, our only opinion is debt principle reduction not more loans. We shouldn’t be accepting more loans for austerity after next round of cuts. If they don’t work, either principle deduction and straight cash injectioins to shore up difference or straight default.

    If the Troika push us to straight default option, we should kick their officials to curb for their pretentious cruelty, and take back our full national sovereignty.
    (including return to drachma) It will actually lead to very severe
    negative economic effects in short term but if other EU members don’t care at all
    about Greeks (e.g. where are the pressure on FYROM for their anti-Greek hysteria and attempt to usurp our identity?) there would be no point continuing with the EU project. I would rather be poor with people that care about me than rich with people that are get their kicks being cruel towards my family.

  3. There will be no solution until the US election – and after the election the exit and the Drachma will help to solve the problems.

  4. And because you are right – the kicked German taxpayer will never pay our bills.
    And why should they pay for our billionaires?

  5.  The drachma will not “solve” problems.  It will create new economic problems much more severe. Money is just a piece of paper. It is worthless unless someone else wants it. No one outside of Greece will want to be paid in drachmas and no on inside of Greece will want to be paid in drachamas. What will happen is hyper inflation and more widespread poverty that makes current situation look like a holiday.

    I for one support EU membership and austarity but if the Troika keep pushing us to lower and lower standards of living it signals to me that the EU doesn’t care about us. If that is the case I would prefer to be poor but completely independent country over a poor and not-independent country constantly ridiculed  by foreigners.

  6. Don’t fall for the far leftist gobbledygook line that rich or government are solely blame for all our economic problems (to push their crypto-commie agenda). It’s over simplifying things and only creates political instability and lawless mentality.  There is plenty of blame to go around to rich and poor alike for our problems. The rich are not to blame for any lazy poor Greeks that show no initiave to create new industries . The rich are not to blame for any poor that also cheat on their taxes by avoiding paying vat or doing cash jobs for undeclared income.

    The best way to tackle corruption over short turn is down size government (this way the entitlement parasites, whether rich or poor, can no longer can feed off of government). Over the longer term Greek government needs to invest money into building a strong tax collection system  When the latter is fixed and we have finally managed a budget surplus then we can talk about services again.

  7. I wish it was really so simple. The reality is that all this is just a farce that people in Greece have to put up with, while the people in power here in Greece are just enjoying their lives while they eat and drink and live happily ever after. Make no mistake, all the measures will take the go ahead. The PM will just claim that this set of austerity measures will be the last one… till the next one, of course. In the mean time, more pensioners will struggle, more sick people will have trouble getting their medication and more people in the private sector will lose their jobs. 

  8. I support austerity, in terms of applying it where it’s truly necessary and not going off board with it. I don’t support cutting a hand when the hand is aching. I support healing the patient, not killing the patient. And when one suggests something, one should first wonder if they ‘re willing to apply those things to their lives, to themselves. 
    6 days of work? Seriously? What is that going to do, especially when according to the EU statistics Greek people already are working like dogs? Greece’s problem is not that its’ workers don’t work. It’s all about HOW they work, lack of technology, and bureaucracy all over. Instead of trying to get Greek people work like China people (salaries so low they won’t be able to sustain themselves and work like dogs), perhaps the so called reforms should target to where Greece truly aches and that is, bureaucracy, a good, firm and steady tax system so investors truly know what they deal with, as well as the citizens, and same laws for everyone. 

  9. They should not. But Germany still owes us some good money since WW2. Just because the Greek Goverment chooses to do nothing about it, we as the people should not forget that.

  10. Better off to hand over the keys to Germany for a better live and a future…Greek politicians are worthless…

  11. With the Drachma the export will grow – the import will be less – much more people will have work.

  12. Never give up political power to a foreign country, Hellas isn’t a colony, our ancesteros have suffered enough so we can be free. I understand your helplessness because of our stupid politicians but don’t make this mistake. Germans are just interested in their own interests. Germans work for Germans, they don’t care about us. Besides it is also a matters of pride : If we can’t resolve our own issues, people won’t respect us. This is a Greek issue, not a German one.

  13. Alexander was Great and even now people from Egypt, Afghanistan, ect … have respect for him and his accomplishment. Besides, I understand and respect your point, but please it’s not a reason to criticize ones of the Greatest figures in Hellenic History. We are already criticized from all parts so at least we shouldn’t criticize our own ancestors and their accomplishments even if some of them (like the burning of Persepolis) are bad.

  14. The problem is : we have to find a solution by us. And the other problem is : because of our “newspapers” we lost already a lot of German tourists.

  15. I suppose one would have to reply to you by telling you to see things evenly. In my opinion, there’s no excuse, not for the poor nor the rich to tax evade. But then, the tax system needs to take under consideration how much each citizen and enterprise can contribute via the taxes depending on the income the citizen/enterprise they come up with. Meaning, the rich need to pay the more of the taxes, whereas the poor should pay the less. 
    And clearly this is not the situation in Greece. One should just look into the data coming from the statistic office of the ministry of finances and they ‘ll understand what I am talking bout.
    As for tax evasion again I ‘ll say this , no excuses. Enforce the rules, catch those that evade, punish them. 


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