Thursday

29th Sep 2016

Greece and EU to tackle labour market reform

  • Labour market reforms are “sensitive” for Greece’s left-wing government (Photo: EUobserver)

Greece believes it is on track to agree the next disbursement of its bailout by the end of September, pending agreement on labour market reforms.

A Greek source told EUobserver on Tuesday (30 August) that all other creditor demands had been satisfied and that talks should conclude shortly after eurozone finance ministers meet on 9 September, with the €2.8 billion payment to be made by the end of next month.

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The source said the reforms are “sensitive” for Greece’s left-wing government, however.

They added that if some EU states were to push for a tough definition of what constituted EU “best practice” in terms of the balance of rights between workers and employers then there could be a “substantial” delay.

The negotiations have also been clouded by the case of Andreas Georgiou, the former head of the Greek statistical office, Elsat.

Greek judges have reopened a case against Georgiou on grounds that he abused his powers when he reported, in 2009, that Greece had a higher than disclosed deficit, prompting the debt crisis and EU rescue package.

The Greek courts have not questioned the accuracy of his figures.

But the EU commission has taken his side amid concern that the case could lead other civil servants to keep quiet if there is something wrong.

The commission’s spokesman Margaritis Schinas said on Monday that there was no doubt on the accuracy of the Elsat numbers from 2010 to 2015 but that there was a need to “depoliticise the Greek administration”.

The Greek finance minister also met with the EU finance commissioner Pierre Moscovici in Brussels on Monday to create a new consultation mechanism, called a “red telephone”, to help settle such disputes more quietly, amid concern in Athens that right-wing anti-EU groups would start accusing the EU of interfering in Greek courts.

The €2.8 billion payment is to help Athens service its huge debt pile.

But EU finance ministers will in October begin to address the issue of whether to write off some of the debt in order to allow Athens to return to normality more quickly and to make the International Monetary Fund more likely to participate in what is left of the rescue programme.

New figures from Greek statistical body Elsat out on Monday said the economy had shrunk by 1 percent in the first quarter of this year and by 0.9 percent in the second quarter.

The previous estimates were that it had contracted by 0.8 percent and 0.7 percent, respectively.

The shrinkage, for the fourth quarter in a row, means that Greece is now the only EU state to have endured a recession over the whole of the past year.

New EU rules on financial products in limbo

A feud between MEPs and the EU commission is threatening to derail financial services regulation that would protect consumers from misleading investment products.

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