One of the biggest obstacles to closing a deal on uncompleted reforms and trigger the release of a one billion euro ($1.37 billion) installment from international lenders – whether to shut down or privatize Greece’s money-bleeding defense contractor – is close to being resolved.
The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB had wanted Greece to get rid of Hellenic Defense Systems (EAS) but now has reportedly settled on an agreement to let it be split in two, one part handling military contracts and the other civil.
The two sides are reportedly talking about how many of the 818 employees who work at EAS will retain their jobs under a new, pared-down version of the public company. The government is hoping to keep 341 of the workers on.
“I think we will soon have an agreement,” Greek Prime Minister Antonis Samaras told Sunday’s Kathimerini. “EAS will have to be limited to the useful and effective units and the absolutely necessary personnel. It will also have to retain their production capacity, competitive qualities and export orientation. We can build a modern defense industry on this basis.”
The Troika was said to be showing some flexibility even though EAS is a big money loser packed with patronage hires for decades by Samaras’ ruling New Democracy Conservatives and his coalition partner, the PASOK Socialists.
The lenders are eager to release the delayed installment so Greece, which is almost totally dependent on the last vestiges of a second bailout for $173 billion that went along with a first for $152 billion can keep paying its bills, including a 1.85 billion euro ($2.54 billion) due Jan. 11, 2014.
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