Greece Girds For Troika Return, Reform Battle

Greek Prime Minister Antonis Samaras has a tough balancing act with the Troika and unions
Greek Prime Minister Antonis Samaras has a tough balancing act with the Troika and unions

Greek Prime Minister Antonis Samaras’ coalition administration faces a stern test this week with the return of envoys from international lenders and is bracing for a battle with them over the part-privatization of the country’s Public Power Corporation (PPC).

The government, caught between the competing interests of the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) on one hand, and unions and the major opposition Coalition of the Radical Left (SYRIZA) on the other, said it will press ahead with selling off part of the PPC.

The New Democracy Conservative leader Samaras and his coalition partner, PASOK chief Evangelos Venizelos, are expected to meet in the next few days to discuss the PPC reform, but the Premier told the German newspaper Handelsblatt that Greek unions “will not dictate our course.”

The two coalition leaders, and Greece’s new Finance Minister, Gikas Hardouvelis, also have to deal with the demands of the Troika, which may not be happy with the half-hearted privatization PPC effort either, as it has pressed for more and faster sell-offs of state enterprises to raise critical cash.

The were be an audit of Greece’s finances, focusing chiefly on whether the government has made progress on two sets of six prior actions, each set linked to 1 billion euros in rescue loans, as what’s left of 240 billion euros ($327 billion) in two rescue packages is being dispensed.

The government said it has made progress to satisfy the Troika and is forging ahead with zoning changes that would allow building in residential areas and even in public parks to bring in money.

In response to Troika demands for the abolition of a series of third-party charges, the Development Ministry has set up an electronic platform, and has appealed for the help of citizens, to make a full list of such taxes.

Authorities must still enforce a new code of conduct for lawmakeers and ministers and finalize measures reducing the profit margins of pharmacists among other actions, although druggists have regularly staged strikes and protests and said they want to protect their monopoly.

But Samaras has to show the Troika he’s doing something to meet fiscal targets so that Greece can begin negotiations on trying to restructure or reduce what it owes the lenders, although that could mean taxpayers in the other 17 Eurozone countries would have to pick up the bill for generations of wild overspending by alternating New Democracy and PASOK administrations.

It’s going to be a difficult balancing act as Samaras has also pledged to give relief to austerity-battered Greeks and is planning to reduce some of the big tax hikes he implemented on Troika orders, especially for heating oil and on properties, although he said he won’t renege on the deal nor impose more pay cuts, tax hikes, slashed pensions or worker firings.

But the biggest stumbling block could be how to deal with what could be an onslaught of court challenges to austerity now that the government said it would abide by rulings to restore the pay and benefits, retroactively, of judges, the police and armed forces and other public workers who have won their cases.

Samaras has so far, however, refused to obey another order to restore the lump sums of pensioners that were slashed about 38 percent for most of them, although some have been protected, including the judges who ruled in favor of themselves.

Reversing those decisions will cost the state an estimated 1 billion euros and could set a precedent for other affected sectors who want their pay and benefits back and who have gone to the courts as well.

The government, which is cherry-picking which orders it will obey, said repaying everyone would undo reforms and thwart what it said is a coming recovery from a crushing economic crisis that has seen record unemployment and deep poverty.