The meeting was also attended by Finance Minister Gikas Hardouvelis, Labour Minister Yiannis Vroutsis, Administration and eGovernance Minister Kyriakos Mitsotakis and Deputy Finance Minister George Mavraganis, AMNA reports.

Exiting the Maximos Mansion Hardouvelis said he briefed the two political leaders on the negotiations in Paris. “It went well. We had progress. We did not close the issues. We continue,” he said, while regarding the possible extension of the current programme he said: “there could be one for a very short period of time for technical reasons.”

The government appears certain that there will be an agreement with the troika by the end of the year. A source close to the Prime Minister stated that “those who invest in catastrophe will be disappointed as there was no wreck or destruction in Paris.”

Negotiations with the troika will continue via teleconference calls in the coming days.

Most of the haggling has been over a projected fiscal gap in the 2015 budget, protothema.gr notes. Failure to strike a deal by the December 8 deadline means that the Greek government won’t be able to keep its pledge of quitting its bailout programme by the end of 2014.

The main issues of discontent are:

- A Finance ministry official pinpointed the “number one” issue being the fiscal gap for 2015. A Greek official said that “the timetable is very tight.” Meanwhile, a European source said that the troika would like to see the new law for debt settlement in 100 installments to be scrapped altogether.

- The troika is not satisfied with structural changes in social security thus far and is seeking to see pensions immediately reduced. They also want the pension age to be lifted but believe that this should be done gradually over a five-year period.

- Troika wants businesses to be excluded from the recent law that allows for debt settlement in up to 100 installments.

- Troika believes that there should be a common salary chart for the public sector or, at the very least, a reduction of “extra” bonuses and overtime.

- International creditors are seeking to have VAT rates increase and for VAT exemptions on some islands to no longer apply. They want the reduced 6.5% and 14% VAT rates for items that are considered basic needs to be lifted.

- The troika would like to see Greek labour law to include mass dismissals and changes to the way decisions for strike action are structured as well as changes to the law on unions.

Sources said that discussions with the troika had not resulted in a date being set for the return of troika’s representatives to Athens for a review prior to the Eurogroup meeting on December 8. Nonetheless, the extension of the bailout has yet to be discussed.

The markets have been negative concerning Greece’s early exit from the program with Greek government bonds having slumped and Greece’s 10-year bond close to 8%.

According to Kathimerini, an email sent to the Finance Ministry by European Commission representative Matthias Mors, and leaked in the Greek media yesterday, referred to the troika’s doubts about the credibility of the government’s plan for overhauling the three firms while they are still in operation. Instead, the troika proposed liquidation for EAS and ELVO and, in Larco’s case, the possible splitting of the firm into two before its attempted sell-off. “The proposed restructuring plans are in our view not viable or realistic,” the e-mail said. “In our view, the option of closure/liquidation must be considered for all three companies,” it added.

Earlier in the day, Finance Minister Yannis Stournaras said the liquidation of the companies over a period of five years would “be more valuable to the state” than bankruptcy. He said the government would try to avert a scenario involving staff being laid off without compensation, claiming that “at least certain parts of the businesses are valuable.”

Enet.gr presented the text of an email sent by the troika to the government rejecting the latter’s proposals to restructure state-owned Hellenic Defence Systems (EAS), Hellenic Vehicles Industry (Elvo) and mining company Larco.

The email was sent my Matthias Mors, the European Commission’s representative in the troika, to the ministries of finance and defence on Monday evening. The email has as follows:

“Thank you very much for forwarding the restructuring plans for the three companies. Please find a detailed reaction from our side with the conclusion that the proposed restructuring plans are in our view not viable or realistic and do not guarantee a sustainable solution from the economic efficiency, budgetary and state aid points of view. In our view, the option of closure/liquidation must be considered for all three companies (as reflected in the language of the MEFP/MoU [Memorandum of Economic and Financial Policies/Memorandum of Understanding] and the public announcement in July). In this context, any liquidation should not be conditional on indemnities going beyond legal requirements or on a redeployment of the work force.

LARCO: Our main concern for LARCO is that in your proposal the tendering processes for the two asset clusters are not fully independent from each other (for the privatisation of the smelter and the mines, respectively), thus involving business continuity without addressing the fundamental state aid concerns (the transaction is structured in such a way that there is a high probability that the same investor will acquire both tendered assets and will thus be liable to pay back the State aid). Moreover, the potential investors are required to maintain employment in an over-staffed organisation that has been loss-making since 2008. This is an objective which is not commensurate with long-term viability of the company and is creating additional financial risks.

The alternatives for the government should be either to sell the asset and expect from the buyer to pay the state aid back (as mentioned in the Almunia-Rehn letter) or to sell separately the Agios Ioanis/Larymna concession and the remaining Larco assets in an unbundled fashion, without giving the investor any specific option to acquire all assets or liquidate them otherwise (if they do not find buyers). In this context, the assessment of the alternatives would be facilitated if you could provide us with pre- and post-restructuring financial accounts.

HDS [Hellenic Defence Systems, EAS]: You are envisaging EUR 144 million of State funds to the military activities that would result from the split between civil and military activities of HDS, additional to the already inherited liabilities from the past. The proposal is basically calling for a rather generous early retirement and exit scheme, which would have implications in terms of fiscal space and the programme. Given the fiscal space constraints and the dependence of the company on domestic orders, we believe that this is not a viable solution and the company should be liquidated. If a case could be made from a national defence objective perspective, this has to involve a substantially downsized/restructured company which is domestically oriented. It has to be seen whether at such lower scale (given lower revenues but possibly high fixed costs) it makes sense from an economic point of view to keep the company on the market or whether one should just to proceed with outright liquidation.

ELVO: The special liquidation plan is more costly compared to bankruptcy. For example, if the company is liquidated EUR 13.5 million are needed for severance payments; however if the company continues to function under special liquidation regime it will need EUR 27.5 million to run operations until the conclusion of the current backlog contracts.

The assumption in your analysis that the shareholder’s losses will stop upon the completion of the backlog contracts and that the company may win further contracts allowing thus the completion of the development plan is not realistic and does not guarantee any security related to the viability and future of the company. In conclusion, we consider that an outright bankruptcy of the company is the most desirable and realistic solution.

We look forward to receiving a new improved version of the restructuring/liquidation plans for the three companies, which take into account our comments/suggestions.

Best regards, Matthias”

Samaras has requested regular updates by FinMin Yannis Stournaras on the implementation of the VAT reduction in food.

Restaurants and other catering outlets that pass on a recently agreed VAT reduction to consumers will receive a special sign that they can display to customers from the associations to which they belong.

This was decided during a meeting between Development Minister Costis Hatzidakis, restaurant owners, the Hellenic Confederation of Professionals, Craftsment and Merchants (GSEVEE) and the Association of Greek Tourism Enterprises (SETE), AMNA informs.

The finance ministry’s general secretary for revenues Haris Theoharis also left open the possibility of adopting a SETE proposal calling for the 24-hour closure of any business failing to issue receipts.

The system proposed is based on the French model adopted after a similar VAT rate cut in 2009. Under this, the various business associations will award the enterprises wanting to participate in the system with a special sign certifying that they have revised their prices to incorporate the VAT reduction and pass gains on to consumers. A separate sign of a different colour will be handed out to those businesses that only partially pass the VAT cut to their customers.

The Premier has also prioritized tourism, public administration, taxation, outstanding debts, health (insurance funds and EOPYY) and education.

What lies ahead is Samaras’ visit to Washington in August, during which the Premier will have the opportunity to discuss with US President Barrack Obama a number of international matters, such as Cyprus and the naming dispute with FYROM.

Maximos Mansion sources argue that despite the crisis, Greece has managed to increase its standing, in part thanks to the developments in energy, such as the singing of the TAP pipeline and the search for hydrocarbons.

The Prime Minister is also hoping on the positive messages from the recent visit by US Treasury Secretary Jack Lew. The Greek side hopes that the PM’s visit to Washington will attract investments.

“We made very good progress,” Poul Thomsen, head of the IMF’s mission to Greece told reporters yesterday, adding that he hoped talks would be concluded early today, before the Eurogroup meeting of finance ministers.

Finance Minister Yannis Stournaras also said he was optimistic of a deal on Monday morning. The two sides were due to leave Athens yesterday, but could remain in touch to nail down final details, Reuters informs.

Government sources have suggested that the troika is in a position to complete its review of the adjustment programme and allow Eurozone finance ministers to decide later today whether to release another EUR 8.1 billion of bailout funding.

According to Kathimerini, a deal seems to have been clinched after the troika inspectors accepted Administrative Reform Minister Kyriakos Mitsotakis’ plans for completing a labour mobility scheme involving 12,500 civil servants.

However, Mitsotakis had to agree in return that the programme would run for eight months rather than 12. It appears that as a result of agreeing to shorten the duration of the scheme, Mitsotakis will be allowed until the end of September to identify all 12,500 public sector workers who will be transferred to other positions.

“It is sealed, there will not be any more meetings regarding the public sector,” Mitsotakis said on Saturday afternoon. “All that is left is for the Eurogroup to give its approval.”

According to sources, 5,000 of those who will be included in the programme will be local authority employees, including school crossing guards and cleaners. Some 3,500 municipal police officers will also be added. They will undergo an evaluation and for every one that is transferred to the main police force, another three will be dismissed. Another 2,000 employees are to come from the education sector, while ministry personnel will also be added once the restructuring of government departments is completed.

The two sides also appear to have reached an agreement over a supposed funding gap of about EUR 2 billion for this year and next. The Greek government said that it would “claw back” much of the overspending at healthcare provider EOPYY by forcing private clinics that worked with the public organization to accept reduced payments.

There were also reports that the troika agreed to the seasonal reduction of value-added tax in the food service sector from 23 to 13 percent in return for a rise in tax on luxury goods.

The next tranche of international aid for Greece could be split into installments, EU commissioner Olli Rehn said, holding out the prospect of a continued hand-to-mouth existence for Greece that threatens to stifle its economy.

According to media reports, Rehn confirmed what many officials have expressed privately amid growing frustration with Athens’ slow pace of reform, namely, that the tranche could be split into several installments.

According to protothema.gr, it seems there is progress in all aspects of negotiation with the troika, while the reference to a “political agreement” by FInMin Yannis Stournaras means that despite the progress made and the distance traveled by the two sides the full agreement is still pending. However, as a government member said, “Troika will show flexibility to not ruin the deal.”

“We are going towards a political agreement on Monday,” Stournaras said.

The difference on the issue of redundancies and the mobility programme cannot be covered since according to the previous agreement the Greek government should have proceeded to 2,000 layoffs by the end of June as well as speeding up the mobility programme in the public sector. Troika is not convinced for the collection of property tax either despite the arguments of the Greek side.

Government said that delays to the transfer issue of civil servants is due to the previous minister, who resigned and that they will now move the programme faster.

Discussions will continue until Sunday, although the main points of the agreement should be found until the end of the day today [Friday], in order for the Commission to be prepared for the recommendation to the Council of Finance Ministers.

Kyriakos Mitsotakis, Administrative Reform Minister, speaking to reporters, said “we will be ready on Monday”, adding it was necessary to have a deal on the issue of the public sector. “Let me tell you categorically that there is no issue of raising the number of dismissals, beyond the 15,000 agreed by the government,” Mitsotakis added.

“The negotiation is in full swing taking note of all prior actions needed to be included in an omni-bill intended to be tabled to Parliament on Monday,” the sources said.

Key cabinet ministers attended yesterday afternoon a new meeting with the troika representatives, chaired by Finance Minister Yannis Stournaras.

According to government sources, the presence of ministers at the finance ministry indicates an effort to complete the negotiations with the troika as quickly as possible.

Greece has three days to reassure its lenders it can deliver on conditions attached to its international bailout in order to receive the next tranche of aid, four euro zone officials said to Reuters.

There is a general dissatisfaction with progress in Greece when it comes to reforming its public sector, such as tax and custom collection or health care services, a senior euro zone official involved in negotiations said.

“All agreed that Greece has to deliver before the Eurogroup on Monday. That’s why they must present again on Friday,” a second source said. Link

However, European Commission yesterday denied media reports according to which Greece had been given three days to settle pending issues of its current review by the troika of lenders mission in Athens before jeopardising the disbursal of its next loan tranche.

Simon O’Connor, a spokesperson for European Commission Vice President Olli Rehn, said that the only truth in the reports is that in order for the Eurogroup to be able to reach a decision or an agreement this coming Monday, talks in Athens must be through earlier.

“We have set no deadline,” O’Connor said on behalf of Rehn, referring to the Reuters report. He said the Commission does not comment on ongoing negotiations.

Asked whether the next loan tranche of EUR 8.1 billion will be released in further installments, O’Connor said that in the last six months, the usual practice is to disburse the loans in installments, depending on the political terms agreed upon.

“Greece is determined to fight and win this battle; there is no other alternative for us. And we are winning,” Samaras said in a speech addressed to Greek and Chinese businessmen, enet.gr writes.

The Premier repeated that the fears of a “Grexit” are now becoming the certainty of a “Greekovery”. “Having achieved a safe political, fiscal and financial environment, we are currently implementing innovative structural changes,” Samaras said.

The Prime Minister invited investment in the fields of shipping, tourism, food and beverage, pharmaceuticals and new technologies, using Cosco’s presence in the port of Piraeus as an example of a successful Chinese investment in the country.

Samaras went on to praise the Greek and Chinese civilisation, pointing to the countries’ long history and their world-renowned philosophers. “We should not forget that Socrates and Confucius lived at the same period and are world-widely acknowledged as the fathers of philosophy,” he said.

“Confucius spoke about the path to wisdom. Plato wrote about the path to virtue,” Samaras concluded. “Let us join our forces, to establish our own common path to a very prosperous future.”

Meanwhile at a speech at the Chinese Academy of Social Science Samaras said: “Chinese Culture and Greek Culture gave “meaning” to human societies, across the borders and across the ages. They both provided time-transcending ideals, principals, norms, rationality, ethics and aesthetics that enriched spirituality, beyond short-lived intellectual fashions, trivial concerns or momentary impressions.”

“Indeed, we are so different in size, location on the globe and social systems. And yet so similar in other respects: we both suffered dramatically from foreign aggression and occupation during the Second World War. Our peoples fought on the same side of the anti-fascist war and endured a lot of suffering. And this binds us together even more. Finally, we both went through periods of painful transformation after the War. And we have covered a very long way in a very short time these last decades… In a short and shallow perspective, we seem to be on different “trajectories” or in opposing “phases”. But in a broader and longer perspective, our destinies are closer than most “outsiders” can suspect.”

The decision likely to be taken at the Eurogroup summit will relate to a EUR 4.3-billion tranche for the first quarter of the year and a EUR 3.3-billion installment slated for the second quarter, though the release of the latter slice will also require a separate positive assessment by the Euro Working Group. The European official emphasized, however, that authorities still have much to do, particularly in the areas of overhauling the public sector and the tax collection system.

Meanwhile, the Center for Planning and Economic Research (KEPE) has indicated that the government’s indecisiveness constitute any half-hearted attempts to deal with the opening of closed professions ineffective, tovima.gr writes.

While some professions have been deregulated to a great extent (chartered surveyors, tax consultants and customs agents), many others remain unchanged or experience further regulation.

KEPE notes that the greatest degree of regulation are the “scientific professions” such as lawyers, mechanics and health practitioners, as well as a few others such as taxi drivers and newspaper retailer.

KEPE suggests in its study that apparent benefits in deregulated professions do not reflect a change in attitude, as much as a

reduction in new professionals.

The report examined the degree of regulation in 90 professions/economic activities affected by the relevant reform laws. As explained in the paper, the degree of regulation is measured both for the regime before and for that after the laws’ implementation and the methodology employed is that of composite regulation indice.

The results of the analysis point to the existence of significant barriers to competition before the reforms and significant changes in the regulatory regime after the application of the relevant laws.

Moreover, the results suggest that occupations characterised by more stringent restrictions before the adoption of the laws tend to be characterised by a comparatively higher intensity of regulations after the laws’ implementation.

Government sources said that “there is still no such request from the Greek side, nor a discussion with troika” but we are considering examining the issue in the near future, provided that “the Greek side will be completely ready” to meet the prerequisites to be met until then.

Such a development could possibly mean that troika might not be required to come back to Athens in June if the government proceeds timely with some issues provided by the memorandum, like the numbering of all transactions with the State with a single number (which will integrate Tax Identification Number, ID and other identification numbers), changes in tax laws (simplification), etc.

Meanwhile, Adminstrative Reform Minister Antonis Manitakis and his associates are currently working on the final details nfor the preparation of the bill regarding changes in the public sector, tovima.gr writes.

According to the plan, the ministries will have about 50% less placements and reduced staff. The new bill will focus on effectiveness, efficiency, fiscal benefits and reducing operating cost criteria, while emphasizing is job placement organization and recruitment. The main focus is on merit and the qualitative improvement of staff and services provided.

One of the main aspects of the new bill is the issuing of presidential decrees. The government plans to restructure each ministry, so that they are more functional and effective. The detailed description of each position, along with the responsibilities and duties of each directorate, department and position are critical.

The goals of each department and ministry will become the goals of each employee, so staff will be evaluated on the degree to which they completed their tasks. These evaluations will determine whether an employee will face a dismissal or a transfer to another department.

Essentially, the new bill contains the tools by which a number of other reforms are to take place, such as the 15,000 dismissals by the end of 2014. The bill also ensures that for each compulsory dismissal there will be one recruitment. About 10,000 successful applicants who participated in ASEP competitions will cover these recruitments.

Meanwhile, the “surplus” employees from positions and departments that are to merge or be abolished will be inducted in a mobility scheme for transfer to other positions, based on staff evaluation and needs. The employees from public law entities will be given incentives to retire, while employees from private law entities will likely face outright dismissal. Along with employees facing misconduct charges, private law employees in the civil sector are the first to face dismissal.

Government sources told the paper that the Premier would likely put back an anticipated cabinet reshuffle until after June 28-30, when conservative New Democracy is to hold a congress, or even later.

The Premier currently has more pressing concerns, chiefly overseeing the implementation of reforms voted into law including the politically sensitive process of merging and abolishing state organizations, as well as speeding up the privatization programme.

The Euro Working Group approved the disbursement of EUR 2.8 billion tranche of March. On May 13, the Eurogroup will meet to approve the EUR 4.2 billion tranche of the first quarter of 2013, while in late May Greece expects the IMF Executive Board approval to disburse another EUR 1.8 billion.

On May 20, Greece will have to repay bonds of EUR 5.6 billion held by ECB, which is expected to occur smoothly as the disbursement of EUR 4.2 billion from EFSF will provide the bulk of this issuing.

Finance ministry in an announcement said Euro Working Group meeting approved a EUR 2.8 billion tranche and paved the way for the EUR 6 billion of the tranche expected to be approved by Eurogroup on May 13.

“There was a positive appraisal of the implementation of the Greek program and clear references to the government’s determination to proceed with reforms.”

Meanwhile, GSEE, the confederation of Greek workers, has announced a 24-hour strike to take place on the 1st of May.

The strike is in response to the government’s decision to move the holiday to the 7th of May. A number of individual unions and federations have already announced similar plans, such as PAME.

Athens Metro employees union has announced a walkout from the beginning of their shift until 9am. In their announcement they explain that “May the 1st is a strike, not a holiday”, while adding that “we operate for the striking workers, so that they can easily travel and participate in demonstrations, marches and protests.

Also, Panhellenic maritime worker federation PNO has announced a 24-hour strike of all crews, of all ship categories, which will begin midnight.