“We wrapped it up; we have a deal with the troika,” Yannis Stournaras, the nation’s finance minister, told reporters.
Greece has been offered two bailouts worth 240 billion euros, or about $310 billion, over the last three years through a memorandum of understanding with the troika, which comprises the European Commission, the European Central Bank and the International Monetary Fund.
In a televised address, Prime Minister Antonis Samaras said the deal showed that years of austerity were beginning to pay off.
“The situation is changing,” he said. “Until recently, Greece had been the example to avoid. In two years, Greece will no longer depend on the memorandum. It will be a country with growth.”
The troika issued a joint statement saying that Greece was on course to curb its huge debt burden, which stood at 160 percent of gross domestic product at the end of last year.
“Fiscal performance is on track to meet the program targets, and the government is committed to fully implement all agreed fiscal measures for 2013 to 2014 that are not yet in place,” the troika said, adding that the release of a loan installment of 2.8 billion euros that had been due in March “could be agreed soon by the euro area member states.”
Poul M. Thomsen, the I.M.F. envoy to Athens, said in a conference organized by The Economist that the 2.8 billion euros, as well as an additional 7.2 billion euros for the recapitalization of Greek banks, could be released as early as next week
The troika said that an agreement had been reached on streamlining the Greek civil service and emphasized the importance of recapitalizing Greek banks without delay.
It added that Greece would probably return to growth next year.
Mr. Stournaras was even more upbeat, saying Greece aimed to achieve a primary surplus this year, which would allow it to seek more debt relief, according to an agreement with creditors.
The issue that caused negotiations to stall in mid-March was the overhaul of the civil service, a contentious topic that has tested the cohesion of Greece’s fragile coalition government.
The two sides finally agreed over the weekend that 15,000 civil servants would be dismissed by the end of next year, including 4,000 this year, according to reports in the Greek news media. The departures are to include employees close to retirement and an estimated 2,000 who have been accused of disciplinary offenses.
In his address, Mr. Samaras said the 15,000 layoffs in the state sector would be replaced by new recruits as part of “a qualitative upgrade of the civil service.”
“The same number of new young people will be recruited in their place,” he said.
Mr. Thomsen of the I.M.F. had said earlier that there would be new hires in the civil service, without specifying how many or in which areas, though the troika is believed to be eager to see the bolstering of tax collection services.
The plan for the civil service overhaul prompted vehement reactions from the government’s political rivals, with Alexis Tsipras, the head of Syriza, the main leftist opposition party, calling it “a human sacrifice” that would merely swell the ranks of the unemployed, who now make up 27 percent of the population.
Others have said they suspect the hiring pledge is a way to start laying people off without strong protests.
Antonis Manitakis, the administrative reform minister who has been assigned the task of overseeing the public sector overhaul, said on Monday that the Greek civil service, which had just under 800,000 employees in 2010 when the country signed the first of its two foreign bailouts, was expected to shrink by a quarter by 2015, with 180,000 departures. These departures would include layoffs but would chiefly be early retirements, Mr. Manitakis said, without offering a breakdown of the figures.
As Mr. Samaras confirmed in his speech, foreign inspectors also accepted Greek demands to reduce by 15 percent a property tax that was introduced as an emergency measure in 2011 but has been extended.
The two sides were also said to have agreed on allowing Greeks who owe taxes and social security debts to pay them off in up to 48 monthly installments.
Mr. Thomsen said that widespread tax evasion “remains a huge problem,” though he added that Greece had “indeed come a long way.”
“The fiscal adjustment has been exceptional by any standard,” he said.
Article source: http://www.nytimes.com/2013/04/16/business/global/greece-reaches-new-deal-with-lenders.html?partner=rss&emc=rss
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