Yesterday's agreement between Greece and the troika offer the nation hopes that it will be granted at least 10 billion euros in loan disbursements by lenders. Prime Minister Antonis Samaras sounded hopeful, stating: "The long negotiations with the troika have been completed successfully".
Now Greece's government has to produce legislative reforms agreed upon between both parties, for the upcoming April 1st informal Eurogroup meeting. Even though the deadline deal was stalled for two days, it comes just in time for the approval of the nation's upcoming aid tranche. Discussions have been slowly making strides for the past seven months.
The deal was settled yesterday afternoon and while neither Athens nor the troika publicly stated any comments surrounding the specifics of their agreement, Samaras acknowledged there would be a 3.9% reduction rate on all social security accounts. Further details are to be discussed today when the Prime Minister is scheduled to meet with Deputy Premier Evangelos Venizelos. According to governmental sources, the two must determine if the reforms agreed upon will be legislated in a single multi-bill or if several draft laws will be administered to Parliament. The alliance wants to pass the measures before the month's end so the approval by eurozone finance ministers on the next tranche can occur on April 1st and be distributed.
The maximum amount of aid that can be granted to Greece is 3.6 billion and 11 billion euros from the IMF and the eurozone, respectively. According to reports, the nation agreed to implement 75% of the 329 liberalization efforts, on the recommendation by the Organization for Economic Cooperation and Development. An additional 15% will be fitted to the Greek market and the final 10% have been stalled. Finance Minister Yannis Stournaras explained that the dragged out discussions were the most challenging in the four years since Greece needed a bailout.
Creditors are now in agreement that Greece has satisfied its budget promises and no more cuts are currently needed. Both parties agreed that the nation's primary budget surplus was at 812 million euros before debt repayments. Additionally the Prime Minister stated: "More than 500 million euros will be immediately granted to 1 million Greeks", adding that this would be given to security services workers and police earning less than 1,500 euros. 20 million euros will be directed to the nation's homeless population and 1 billion euros in outstanding debts to suppliers would be paid by the state. Another 1 billion euros will be allotted to the reduction of the national debt.
Greek heads of state settled on severing public sector mobility regarding layoffs and for fine reductions on late tax payments. Administrative Reform Ministry authorities stated that civil servant firings will carry on until 2015; even if the allotted 15,000 workers have been laid off. This decision is the result of scaling down public entities or through disciplinary means. Additionally, Athens came to an agreement after many efforts with the troika, concerning its mass dismissal rules which required the labor minister's consent. It was agreed upon that the issue will now be referred to the International Labor Office which will then arbitrate the matter. Also in agreement was the reduction of an automatic three-year pay raise by 50% beginning in 2017.
It has been determined that Greece's primary surplus for 2014 is 2.9 billion euros; this is to be confirmed by Eurostat next month. After its confirmation, the nation will then administer pledged aid to 300,000 pensioners and over 400,000 low income families. An extra 350 million euros will be directed towards the nation's social security funds. Samaras explained: "...to repay the enormous sacrifices of the Greek people." Even during this dark economic period for Greece, its government orchestrated a drastic improvement in its budget finances, granting the primary surplus a year earlier than scheduled. (Source: http://online.wsj.com/news/articles/SB10001424052702304747404579446941284299688 & http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_18/03/2014_538279)
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