The unions' central demand is that the government backtracks on its initial proposal for EUR 158m-worth in cuts this year and instead generates savings by reallocating funds achieved through cuts to material costs and by tapping internal reserves.

According to unofficial sources, the government's latest proposal waters down the wage bills cuts to just over EUR 100m.

The government had hoped to reach agreement by Thursday or Friday last week but it now expects to seal the deal today, so that the agreement could already be debated at its Thursday session.

While not excluding this possibility, the unions have said there were still some questions remaining. Moreover, the final agreement will still have to be okayed by every individual trade union.

If the agreement is indeed reached, the public sector would be spared further cuts until at least 2015 and negotiations would be reopened only if anything unexpected happened, according to government officials.