Summer break to be short-lived as negotiations loom

7 August 2016
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The break that government ministers and MPs are set to take next week will be short-lived as the next phase of negotiations with international creditors in September is likely to be just as tough as the previous one.

Sources at the Finance Ministry have indicated that Athens is likely to complete the required 15 prior actions by next month and secure the next tranche of 2.8 billion euros in rescue funding. However, the talks on labor relations and tackling billions of euros in nonperforming loans burdening Greek banks are unlikely to be easy.

A Euro Working Group meeting scheduled for August 29 will offer a sense of creditors’ intentions ahead of a Eurogroup on September 9 when European officials will expect to see signs of concrete progress in the implementation of reforms.

Although insisting that it is committed to reform, the government is also keen to appease its domestic critics who berate it for going back on pledges to roll back austerity. Labor Minister Giorgos Katrougalos has suggested that Athens will hold a hard line in talks with creditors on labor rights, seeking the reinstatement of collective wage bargaining. Creditors are unlikely to yield, however, having called for more flexibility in the labor sector.

Greece is also keen to launch talks on debt relief. Prime Minister Alexis Tsipras is to explore the prospects for an alliance of Southern European countries backing Greece’s debt demands at a summit of socialist heads of state due to take place in Paris on August 25. According to sources, Tsipras aims to arrange a subsequent meeting in Athens on September 9 to further explore the prospects of such an alliance.

Last week European Stability Mechanism officials presented some proposals for the short-term management of Greece’s debt during a conference call but, Kathimerini understands, the discussion did not result in any concrete conclusions. ESM officials said they would review their proposals ahead of the August 29 Euro Working Group.

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