PM to un­veil new scheme

Pa­pan­dreou to brief Juncker on mea­sures, paving way for a sec­ond loan pack­age

Kathimerini English - - Front Page -

Prime Min­is­ter Ge­orge Pa­pan­dreou is to present Greece’s midterm fis­cal plan and its pri­va­ti­za­tion pro­gram to the head of the Eurogroup, Jean-Claude Juncker, in Lux­em­bourg to­day as he hopes to se­cure not only the June in­stall­ment of the coun­try’s loan pack­age but the ex­tra fund­ing that will cover an 85-bil­lion-euro gap in pub­lic fi­nances over the next three years.

How­ever, the plan that Pa­pan­dreou is to present will in­clude ex­tra taxes for salaried pro­fes­sion­als and pen­sion­ers.

Pa­pan­dreou is ex­pected to pro­vide Juncker with de­tails about his gov­ern­ment’s fis­cal plan, which will aim to raise or save an ex­tra 28 bil­lion eu­ros by 2015. He will also set out Athens’s plans for sell­ing off state as­sets. Sources said that the pri­va­ti­za­tions of state gam­bling firm OPAP, the Athens Wa­ter and Sewage Com­pany and Athens In­ter­na­tional Air­port are to be bumped up to this year in a bid to con­vince Greece’s eu­ro­zone part­ners that it is tak­ing the pro­gram se­ri­ously.

Pa­pan­dreou will also re­veal how a new in­de­pen­dent agency will over­see the sell-offs.

Fi­nal ap­proval is due to come from the Eurogroup meet­ing on June 20 and any de­tails will be fi­nal­ized at a Euro­pean Union lead­ers’ sum­mit on June 24 that will also pave the way for Greece to en­ter a new three-year loan pact.

Rep­re­sen­ta­tives of the EU and In­ter­na­tional Mon­e­tary Fund are ex­pected to­day to wrap up their in­spec­tion and is­sue a state­ment say­ing that ap­proval of fur­ther fund­ing for Greece is a pre­req­ui­site for the 12-bil­lion-euro June tranche of its loan deal to be dis­pensed.

Not all the ex­tra fund­ing will come in the form of loans, sources said. The EU and IMF will pro- vide 30-40 bil­lion eu­ros of fi­nanc­ing but pri­va­ti­za­tions are ex­pected to bring in 25 bil­lion eu­ros and about 20 bil­lion eu­ros will come from a vol­un­tary debt re­pro­fil­ing. Some pri­vate in­vestors are ex­pected to ac­cept swap­ping their Greek bond with new 10-or 15-year notes. The re­pro­fil­ing will be han­dled in such a man­ner as to avoid trig­ger­ing credit de­fault swaps, sources said.

Mean­while, the midterm fis­cal plan is ex­pected to hit salaried work­ers and pen­sion­ers as the tax-free thresh­old will be re­duced from 12,000 to 10,000 or 8,000. For self-em­ployed pro­fes­sion­als, it will go down to 6,000. Also, restau­rants and tav­er­nas will have to charge 23 per­cent val­ueadded tax rather than 13 per­cent. This mea­sure will be brought in af­ter the sum­mer. Fur­ther taxes on nat­u­ral gas, heat­ing oil, to­bacco and soft drinks are also on the cards.

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