Finance Minister Eucleides Tsakalotos and Economy Minister Yorgos Stathakis are struggling to persuade creditors not to allow all bad loans to be bought up by distressed debt funds – the government wants to exempt home and small business loans - but they reached agreement on what is to be done regarding PPC and the country’s power grid.
On the ADMIE power grid, it was agreed the state will retain a majority 51 percent stake and sell off 49 percent to a listed European power company.
The energy distribution branch will be split off from the PPC, or DEH, and will be transferred to a fully state-owned subsidiary. The 49 percent will be sold both to a strategic partner with expertise in network management, but also through the stock market.
Shareholders will be proportionally represented on the company board – so the state will have a majority - and the managing director will be selected with the consent of the strategic investor. This appears to have resolved the dispute in which creditors wanted private management, while the government had sought to leave it to the state.
An independent valuator will be appointed to determine the price PPC will be paid for its power grid branch.
PPC is expected to be compensated quickly with revenues to be raised both on the stock market and from the strategic investor, but a timetable will be set up.
Civil service wages dispute
Talks with creditors also involved disagreements over civil service wage scales. Creditors seek higher wages for employees evaluated as excellent, while those judged lacking would either retain the same salary or suffer a cut, depending on performance.
The government has strongly opposed linking performance evaluations with wage levels. The government’s proposal, however, does link evaluations with promotions.
The framework agreed to dissociates the wage scale from grading, retains current entry level salaries, and creates 19 salary scales to which employees with university or higher technical school education will be assigned every two years, and 14 salary scales to which employees with secondary school educational background which will be assigned every three years.
Pension reform
Regarding the pension system reform expected in January, Labour Minister Yorgos Katrougalos said that in talks with creditors the government will attempt to protect pensions, while implementing a “just pension system reform”
Katrougalos tabled the idea of an increase in employer contributions to partially cover pension system shortfalls, but creditors reportedly remained wary.
In a memo to SYRIZA MPs, Katrougalos said the government will struggle to retain primary pensions intact. However, many expect cuts in auxiliary pensions, which will ultimately be merged with primary pensions.
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