Juncker, Tsipras discuss greek reform plans

The president of the European Commission spoke on the phone to Greece΄s prime minister on Wednesday to discuss some of the main sticking points in talks on sustained financial aid for the government in Athens.

In a joint statement, commission President Jean-Claude Juncker and Greek Prime Minister Alexis Tsipras said they discussed “the importance of reforms to modernize the pension system” and “the need for wage developments and labor market institutions to be supportive of job creation, competitiveness and social cohesion.”

Disagreement over cuts to Greece΄s pension system and changes to its labor market that make it easier to dismiss workers have held up a deal on further bailout aid between Athens and its creditors.

The joint statement shows that the Greek government is no longer resisting talks on the two issues, but it also underlines that significant distance between the two sides remains. The statement stressed that changes to the pension system needed to be “fair, fiscally sustainable and effective in averting old-age poverty” and that labor-market overhauls shouldn΄t undermine “a modern and effective collective bargaining system” in Greece.

The conversation was requested by Mr. Tsipras, an EU official said, and took place a day after the Greek government complained that differences between its creditors–other eurozone governments and the International Monetary Fund–made it impossible to reach a compromise on promised overhauls.

Later Wednesday, the commission, the European Central Bank and the IMF also released a joint statement, saying they “share the same objective of helping Greece achieve financial stability and growth” and were working hard to make “concrete progress” toward a deal by Monday, when eurozone finance ministers meet in Brussels.

Talks between technical experts from Greece and the institutions overseeing its bailout, which resumed last week, have become more constructive, but differences remain too wide to reach a full deal by Monday, EU officials say.

“So far they have too many red lines,” said one of the officials.

The two side are converging on some contentious issues, including overhauls supposed to make it easier to start businesses, improve competition and open up closed professions, officials say. There is also growing willingness in Athens to raise value-added taxes and privatize state enterprises.

Monday΄s meeting of finance ministers will take place a day before Greece has to repay IMF loans of about EUR770 million.