Greece moves closer to sec­ond bailout pack­age

Juncker, cred­i­tors give pos­i­tive re­ports

Kathimerini English - - Front Page -

Eurogroup Chair­man Jean-Claude Juncker ap­peared con­fi­dent yes­ter­day that an agree­ment could be reached be­tween Greece and its eu­ro­zone part­ners for the re­lease of a fifth tranche of emer­gency fund­ing and pos­si­bly also a sec­ond bailout pack­age.

Fol­low­ing talks in Lux­em­bourg with vis­it­ing Prime Min­is­ter Ge­orge Pa­pan­dreou, Juncker said the two men had been “in to­tal agree­ment” as re­gards Greece’s fis­cal tar­gets, struc­tural re­forms and an am­bi­tious pri­va­ti­za­tion drive aimed at rais­ing 50 bil­lion eu­ros by 2015. But he made it clear that fur­ther fi­nan­cial sup­port would be de­pen­dant on the Greek pri­vate sec­tor shar­ing some of the bur­den of eco­nomic re­cov­ery. “I ex­pect the Eurogroup to agree to ad­di­tional fi­nance be­ing pro­vided to Greece un­der strict con­di­tion­al­ity,” Juncker told re­porters. “This con­di­tion­al­ity will in­clude pri­vate sec­tor in­volve­ment on a vol­un­tary ba­sis.” Juncker also noted “with sat­is­fac­tion” that the Greek gov­ern­ment had agreed to the cre­ation of an in­de­pen­dent agency to over­see the pri­va­ti­za­tion drive.

Call­ing Juncker “a friend of Greece,” Pa­pan­dreou said, “Greece will con­tinue to work hard, and Greece is com­mit­ted to fully honor its obli­ga­tions.”

Ear­lier in the day, of­fi­cials of the Euro­pean Union, Euro­pean Cen­tral Bank and In­ter­na­tional Mon­e­tary Fund – who have been re­view­ing the progress of the gov­ern­ment’s eco­nomic re­forms – is­sued a state­ment say­ing that the re­view had been suc­cess­ful and that the fifth tranche of emer­gency loans, val­ued at 12 bil­lion eu­ros, would “most likely” be re­leased in early July. The re­view noted “sig­nif­i­cant progress, in par­tic­u­lar in the area of fis­cal con­sol­i­da­tion,” adding how­ever that more re­forms were nec­es­sary to re­vive the econ­omy. It added that en­voys had agreed with gov­ern­ment of­fi­cials on “a set of eco­nomic and fi­nan­cial poli­cies” and called for their “strict im­ple­men­ta­tion,” re­fer­ring also to the gov­ern­ment’s midterm fis­cal pro­gram, which aims to raise some 6.4 bil­lion eu­ros through tax in­creases and cuts to the pub­lic sec­tor.

These ad­di­tional mea­sures are ex­pected to be sub­mit­ted in Par­lia­ment early next week. They in­clude the re­duc­tion of the taxfree thresh­old, from 12,000 eu­ros to 10,000 or 8,000 eu­ros for work­ers and pen­sion­ers and from 12,000 to 6,000 eu­ros for self-em­ployed pro­fes­sion­als. An­other mea­sure, to come into ef­fect in the fall, will oblige restau­rants to charge 23 per­cent value-added tax rather than 13 per­cent. Fur­ther taxes are planned for soft drinks, nat­u­ral gas, heat­ing oil and to­bacco. Taxes will also be raised on large yachts, swim­ming pools and lux­ury cars. The midterm pro­gram is also ex­pected to set a time frame for the abo­li­tion of dozens of pub­lic bod­ies. In ad­di­tion, the salaries of civil ser­vants will be taxed a fur­ther 3 per­cent to go to­ward a sol­i­dar­ity fund for the unem­ployed.

Prime Min­is­ter Ge­orge Pa­pan­dreou ad­dresses re­porters fol­low­ing a meet­ing with Eurogroup Chair­man JeanClaude Juncker in Lux­em­bourg yes­ter­day. Juncker said Greece could get more aid ‘un­der strict con­di­tion­al­ity.’

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