According to AMNA, the meeting focused on the restructuring of ministries and agencies and on the mobility scheme that will see some civil servants transferred to cover needs elsewhere and others placed on a gradual layoff programme.

“We ratified the relevant decisions,” Mitsotakis said, “in order for the country to keep its timelines and place on mobility 12,500 civil servants by the end of September.” He added that mobility is an obligation Greece has but will also lead to improved use of existing staff and added that in the first phase of the plan already carried out, all civil servants were transferred to services that were short-staffed.

Mitsotakis described the institution of mobility as a positive tool that will help to better exploit the potential of the public sector and not a memorandum obligation of Greece, protothema.gr writes.

The meeting, chaired by Prime Minister Antonis Samaras, was also attended by government Vice President and Foreign Minister Evangelos Venizelos and several ministers whose ministries’ restructuring was under review.

According to enet.gr, during the government meeting yesterday, a new list was finalised containing the names of 8,099 civil servants who will be placed in the mobility scheme by the end of next month.

Civil servants placed in the mobility scheme will be involuntarily transferred or paid 75% of their already-reduced salary for up to eight months and then fired if another position can’t be found for them. The decision brings the total number of public service employees to be placed on the scheme to 12,500.

The list draws on staff in all 17 ministries, with the largest number – the 3,000 members of the municipal police – coming from the interior ministry.

Last month, 4,401 civil service employees (2,114 teachers, 2,234 school guards and janitors and 53 staff from the administrative reform ministry) were informed that they were being transferred.

It represents the biggest move to transfer civil service staff in recent Greek history.

The omnibus bill was passed by 168-123 vote on Sunday night, with the support of the three parties comprising Greece’s ruling coalition.

About 2,000 civil servants will be laid off by the end of May, another 2,000 by the end of the year and 11,500 by the end-2014, a total of 15,500.

The measures in the bill had been settled with the troika earlier this month. Greece had to adopt them to qualify to receive its next tranche of loans worth 8.8bn euros.

The legislation included other reforms, such as the number of installments debtors to the state will have to pay the tax and social security contributions they owed, according to eKathimerini.

Athens now expects to receive 8.8 billion euros by mid-May.

Eurozone officials will now meet on Monday to approve the release of 2.8bn euros, Finance Minister Yannis Stournaras said, according to Reuters news agency. Eurozone finance ministers will then meet on May 13 to release a further 6bn euro installment, he added.

Although the number of public sector employees has fallen steadily since the start of the crisis, this is the first time that the government will directly dismiss bureaucrats, eKathimerini writes. They will, however, be replaced by new hires.

Greeks protested in front of the parliament against the government’s plan to lay off thousands of public-sector workers in advance of the voting.

According to the minister, the changes approved would allow Greece to meet targets calling for a 40-50% reduction in administrative structures, effecting savings that exceeded 15%, AMNA reports.

This marked the start of the crucial second phase, in which the studies had to be carried out and new institutions designed, Manitakis added. Government wants to push dismissals forward through an evaluation procedure, by reducing the services at ministries and their supervised agencies. The government partners will discuss in great detail the wording in the bill, to ensure the greatest convergence of opinion before it is tabled in Parliament, tovima.gr writes.

Yesterday’s meeting at the Maximos Mansion also discussed coordinating efforts for the ‘mobility’ of 12,500 civil servants by June and another 12,500 by December. By the end of December 2013, the government must also remove 4,000 public-sector employees, many of which will have to go by June. Manitakis stressed that each departure will be matched by the hiring of a new employee via the ASEP civil servants’ recruitment council.

Administrative Reform Ministry supports a qualitative “upgrade” of staff and evaluation of human resources, in an effort to make services more efficient. A variety of employees will face dismissal, across all government services and agencies, with the government providing some incentives for voluntary redundancy.

FinMin Yannis Stournaras wants all measures to be voted until Sunday so that he finds the chance on Monday, at the Euroworking Group meeting, to ask for at least the EUR 2.8 billion already approved by the Eurogroup, protothema.gr writes.

The Finance ministry is apparently backing off on the operation of shops on Sundays since, after the reaction of the parties, the issue will probably not get included in the omnibus bill.

The bill will include provisions for the extension this year of the collection of the tax hike through electricity bills, but under another name (single property tax) and the introduction of a 15% discount as compared to 2012. The implementation of a single property tax is postponed until 2014, whilst officials spoke of a tax-free limit of at least EUR 50,000 and above that a 0.1% tax in the additional property value of each taxpayer.

This idea is now probably abandoned, as the memorandum goal is to collect EUR 3.2 billion in 2014 from a single real estate tax. FinMin officials already expect significant losses and the budgeted revenue is “clipped” even now to about EUR 2.7-2.9 billion euros.

Talks with the troika would be continued next week, Stournaras told journalists exiting a meeting with Prime Minister Antonis Samaras and the government’s economic staff.

Asked what he will report at the Eurogroup on the negotiations, he said “it is enough for me to say that the negotiations are continuing and that we are on a good path,” AMNA writes.

According to media reports, Stournaras insisted that there was no “blockage” in talks and that there would be “no problem” with the release of further rescue funding, though he gave no indication about when Greece can hope to receive two loan tranches worth EUR 2.8 billion and EUR 6 billion respectively.

According to a leaked document forming the basis of the talks with the troika as regards the civil service, troika

officials have a set of demands. These reportedly include the completion of staffing plans for 275,000 employees, the immediate placing of 8,500 state workers into a mobility scheme, the dismissal of 2,000 civil servants accused of disciplinary offenses, and the approval of a plan for the gradual dismissal of a total of 20,000 state workers by the end of 2014 (of these, 7,500 should leave by the end of this year).

According to Kathimerini, Administrative Reforms minister Antonis Manitakis claims this the immediate dismissal of the 2,000 oath-breaking civil servants is not so straightforward as disciplinary cases must be resolved before staff can be dismissed. Sources said the government was drafting a bill to accelerate the process of the disciplinary hearings though Stournaras denied this yesterday, the paper writes.

The issue appeared to be driving a wedge between conservative New Democracy, which leads the coalition, and the Democratic Left party, to which Manitakis belongs. Democratic Left MPs claimed that four conservative ministers – holding the Health, Labor, Education and Interior portfolios – were to blame for the delay in civil service reform, not Manitakis.

According to protothema.gr, the Premier set thered lines clarifying that the government will not implement new measures, as the Greek economy and society cannot bear them.

Leaving the Maximos mansion, Finance Minister Yannis Stournaras said to reporters that a substantial progress in the negotiations was achieved but he also underlined that many issues remain still open.

“I believe that we will reach an agreement in the next few days,” the FinMin said. “I can’t say how soon this will be because negotiations are ongoing.”

However, on Friday evening, The Guardian writes, Athens’ normally mild-mannered finance minister, Yannis Stournaras, reportedly lashed out at mission chiefs from the EU, ECB and IMF during a heated exchange in his office, telling them they could “take the keys” to the economy ministry if they continued to demand more austerity from a nation experiencing a sixth straight year of recession.

Emerging from the building, the economics professor uncharacteristically labeled the talks as “very difficult” and gave a taste of his own frustration. “The negotiations for the next loan tranches are still very difficult. I can assure you that things are not simple at all,” he said.

After troika representatives abruptly cancelled a meeting with Stournaras late on Saturday, Prime Minister Antonis Samaras tried to smooth over the cracks.

One of the main topics of the government-troika meetings was the transfer plan in the public sector. The government agrees to proceed with the dismissal of perjury public employees by June and those removed to be replaced with an equal number to be recruited through ASEP. While there is political agreement on this issue, the problem is the time schedule does not pan out due to the slow pace of the public sector, protothema.gr reports.

The second major issue has been the National Bank-Eurobank merger and their recapitalization, with the Greek government insisting that it should continue uninterrupted and unchanged despite the delay in collection of amounts required from the private shareholders.

The two sides also discussed the adjustment doses for amounts owed to pension funds and tax offices and how to bridge the financial gap of EUR 2.7 billion for 2013-14. New measures to cover the gap are currently being rejected since they would not pass from a parliamentary voting.

According to information even if there are legal issues the Troika sees that the public sector will not be able to withstand the increased pension costs of tens of thousands of employees who massively apply to guarantee their pension from now. Something similar applies to private sector employees who exercise their right to a pension because they cannot find work. From these discussions, it appears that the Troika favors a legal response to the phenomenon, which will hit those who hastily enter retirement from now, so as not to leave them without income as retired “reservists” of the public sector in the coming years. The same information mentions that even the private sector could not support the hordes of unpaid pensioners that will seek employment and income in the market.

According to ANA, troika officials informed the government that they accepted EUR 5.5 billion of proposed measures, but required clarification on EUR 3.5 billion’ worth of proposals. They deemed the remaining EUR 2.5 billion’ worth of measures as unacceptable. The lenders demanded that the new austerity package allow for public-sector layoffs, a policy the coalition parties reject. They also reject the proposed savings of EUR 517 million in the defence budget, pointing out that the measure simply involves the government postponing EUR 437 million of expenditure until 2015. Troika inspectors also doubt the feasibility of cutting EUR 735 million from the local government budget and EUR 1.4 billion from pharmaceutical spending.

Meanwhile, in a policy paper, Democratic Left party proposed some EUR 1.23 billion in alternative cutbacks in defense, health and energy sector outlays, so as to avoid slashing pensions and other benefits. Greece should avoid across-the-board cuts in bonus payments to pensioners and raising the retirement age, the party said, Capital.gr writes.

According to the paper, savings in defense could be secured through the reorganization and the deferment of procurement spending into the future, health sector savings through more efficient procurement practices, and the reduction in subsidies to certain energy producers.

“The labour reserve plan will proceed,” a source told the agency. “Last time simply was not implemented,” he added. “This is a measure that may not bring immediate and dramatic savings (in expenses), but will lend credibility to all our efforts for reform,” another source stressed.

Finance Ministry’s economic team is expected to present details of the plan to the political leaders. However, the labour reserve issue is expected to create new tension in the coalition, as PASOK and Democratic Left are opposed to the measure, saying they are willing to honour their pre-election commitments.

According to Finance Ministry sources, Greece expects to get its next tranche of international aid immediately after lenders give their final verdict in mid-September as regards the progress of the bailout programme. More T-bills are expected to be issued later in August to cover a EUR 3.2 billion government bond that matures August 20.

Deputy Finance Minister Christos Staikouras said the EC-ECB-IMF troika will return to Athens in early September and complete their review by the middle of the month.

“If that happens and the process is completed by September 14 -this is the framework we’re working within, that’s what we’ve agreed to -then obviously the tranche, if the review is positive as we expect it to be, will come immediately after,” Staikouras said, according to Reuters. Asked if he expected the tranche to be disbursed by the end of September, Staikouras replied: “Immediately after means that if the review is positive, this will open the path for the next tranche.”

According to Kathimerini, a list with the with the first 20 state organizations from around 250 that are to be merged and abolished is expected to be announced today. The first 20 organizations on the list are to be merged with some 200 regional bodies across the country in coming days and weeks while the full list of organizations to come under the ax is to expected to be made public by the end of August, the paper writes.

Government meetings with troika representatives will commence with a list of measures the latter will present, describing the gap between planning and targets accomplished. This list could include actions needed to cover EUR 3 to 4 billion that are missing from the implementation of the bailout agreement.

According to media reports, the meetings will be of preliminary character, since neither of the two sides is ready to negotiate directly. Troika heads will have the results of the inspection of the technical staff that show a gap in state reveneue (estimated somewhere in between EUR 2.4 to 2.6 billion) as well as deficits in pension funds and public hospitals (another EUR 1.2 billion). Given the accelerating recession that is expected to reach 7% of GDP, the hole in the budget could reach around EUR 4 billion by the end of the year.

Troika people know that the Greek government cannot negotiate new measures. In any case, according to the initial planning, discussions are expected to conclude in late August, setting also the basis for an initial draft of the 2013 budget and the revised medium term financial plan.

The next tranche of Eurozone aid is unlikely to be paid before September, the European Commission said yesterday, noting international lenders had to finish an assessment of government-planned reforms that are far behind schedule, Reuters reports from Brussels.

Prime Minister Antonis Samaras held talks with Administrative Reform Minister Antonis Manitakis, who is responsible for the restructuring of the public administration. Sources said that it was agreed the government would announce the closure or merger of 60 public organizations within the next few days, with the rest coming by the end of next month.

Sources also told Kathimerini that the government is set to quickly prepare a draft law that would remove limitations to private investment in public enterprises considered “strategic,” such as the Public Power Corporation. Currently, each investor would only be able to buy a maximum stake of 20 percent and the government would retain overall control of the firms with a 51 percent holding.

Meanwhile, Greek government officials are preparing for a new and crucial round of talks with the troika starting next week.

“Talking to them was like going to a doctor, who is looking over your tests shaking his head, and you’re wondering if you are going to live or die,” a senior Greek government official told Reuters after troika’s first visit with the new government on July 5.

“As we suspected, they have fallen quite badly behind due to the election campaign and they are trying very hard to put the train back on track. The troika’s main task next week is to see how we can get restarted,” said a troika official.

The first visit did not try to resolve specific problems but set a new tone for the relationship between Greece and its partners, making clear there was no time to waste on diplomatic niceties, and not much trust in the bank.