Greece To Receive More Aid Next Week, But Faces Tough Decisions On Public Pension, Electric Grid Privatization

Athens is expected to support a measure that would give the Greek government 1 billion euros ($1.09 billion) of its $95 billion bailout package authorized by eurozone finance ministers in August. The agreement, which comes up for a vote Tuesday, would require Greece to partially privatize its electrical grid and open a market in nonperforming loans held by Greek banks that make up more than half of all lending.

Citing a government official, the Financial Times reported that a draft bill tackling these “milestone” measures toward Greek economic recovery would be delivered to Parliament Saturday. Lawmakers are expected to approve the legislation early next week without any further defections from Greek Prime Minister Alexis Tsipras’ delicate Syriza party-led coalition. Last month, two legislators bowed out of the coalition, leaving it with just a two-member majority.

On Friday, a deal was reached with Greece’s creditors that included other eurozone member states and the International Monetary Fund to keep 51 percent of ADMIE, the country’s power transmission operator.

Last month Athens agreed to spin off ADMIE, which manages the national electric power grid, from the state’s Public Power Corp., which controls almost all of the country’s electricity production. The deal struck Friday to keep most of ADMIE in the hands of the government was seen as a victory for Tsipras, who fought off efforts to sell a majority stake in the grid operator to private investors.

“We’re pulling off significant wins in this negotiation, like keeping ADMIE under state control,” Tsipras told Parliament.

The legislation would also set up a new office to oversee further privatizations and strictly monitor how funds generated from the sale of state assets are used to help pay down the country’s more than $330 billion in debt. In a push to shed some of this debt, Greek Finance Minister Euclid Tsakalotos is aiming for a relief deal with eurozone creditors by February, Reuters reported.

Athens faces a harder test next month when it tackles another reform package to deal with the country’s struggling state pension system. Creditors want significant across-the-board cuts and increases in workers’ payroll deductions to fund the social security system.

So far Greece has received about $26 billion of its $95 billion bailout package, the third of its kind since Greece’s government debt crisis exploded in 2009.