By Lefteris Papadimas and Ingrid Melander
ATHENS/AIX-EN-PROVENCE, France, July 7 Greece is
likely to reach a deal with foreign lenders on its latest
bailout review before a meeting of euro zone finance ministers
on Monday to decide on further aid, EU and Greek officials said
Athens has been in talks with inspectors from the European
Union, European Central Bank and International Monetary Fund
"troika" for nearly a week to show it can deliver on its pledges
after failing to meet public sector reform targets.
Greece hopes euro zone finance ministers will free up its
next 8.1 billion-euro ($10.4 billion) tranche of aid when they
meet on Monday because it needs part of the money to redeem
about 2.2 billion euros of bonds in August.
Bailed out twice by its foreign lenders, Greece relies on
foreign aid to stay afloat. Failure to successfully conclude its
bailout review could push it close to bankruptcy once again,
triggering a new upsurge in the euro zone crisis.
"We made very good progress," Poul Thomsen, head of the
International Monetary Fund's mission to Greece, told reporters
on Sunday, adding that he hoped talks would be concluded early
on Monday before the Eurogroup meeting of finance ministers.
Greece's Finance Minister Yannis Stournaras also said he was
optimistic of a deal on Monday morning. The two sides were due
to leave Athens on Sunday, but could remain in touch to nail
down final details.
The latest loan instalment is one of the last big cash
injections that Greece stands to get as part of a 240
billion-euro rescue package that expires at the end of 2014.
EU Economic and Monetary Affairs Commissioner Olli Rehn told
Reuters in France that the negotiations were almost complete,
but Athens needed to intensify efforts to deliver on reform
"The ball is in the Greek court and it depends on whether
Greece is able to deliver the remaining elements of the
milestones that have been agreed," he said.
He reiterated that aid for Greece could be split into
instalments. Lenders have become increasingly frustrated with
Greece's slow pace in shrinking the civil service and making it
more efficient and less corrupt.
Talks with the troika stumbled last week over a missed June
deadline to put 12,500 state workers into a "mobility scheme",
under which they are transferred or laid off within a year, but
an agreement was finally reached on Saturday.
"The troika gave Greece an extension of a few months," an
official at the administrative reform ministry said on Sunday.
"A second wave of another 12,500 staff will be placed in the
scheme until the end of the year."
According to ministry officials, Greece plans to put around
3,500 municipal police staff into the scheme.
The prospect of job cuts prompted a meeting of the country's
association of local governments on Sunday, where a nationwide
strike was called for the following day.
"The strike was decided because of government plans to tap
municipal workers for the scheme. This will undermine municipal
services," an official at the Athens mayor's office said.
With tempers boiling over the plans to put municipal workers
in the mobility pool, five workers attacked Athens mayor George
Kaminis after he left the meeting, pushing him and throwing
punches, police said.
Other issues discussed with the troika included ways to
cover a fiscal gap, including a shortfall of more than 1 billion
euros at state-run health insurer EOPYY, and a possible
reduction in a sales tax for restaurants that Athens had sought
as a concession from lenders.
Stournaras said the tax reduction issue remained on the
table, adding that Athens managed to avoid further pay and
pension cuts for military and police staff.