Worry over Novem­ber mea­sures

Euro Work­ing Group fears sec­ond batch of prior ac­tions may be too heavy, while first re­view is on­go­ing

Kathimerini English - - Focus - BY SOTIRIS NIKAS & ELENI VARVITSIOTIS

The Fi­nance Min­istry­will make an ef­fort to in­clude some mea­sures in the draft 2016 bud­get to be tabled on Mon­day to ease the bur­den on poorer sec­tions of so­ci­ety, while the Euro Work­ing Group yesterday con­firmed the list of the first batch of prior ac­tions that have to be voted by Oc­to­ber 15 for the first sub- tranche of 2 bil­lion eu­ros to be dis­bursed.

The list of ac­tions is very ex­ten­sive, but EWG mem­bers ex­pressed more con­cern about the sec­ond batch of prior ac­tions that will fol­low, which is “par­tic­u­larly de­mand­ing.” De­spite the dif­fi­culty of the mea­sures, which in­clude tax hikes on farm­ers, the main re­forms in the pen­sion sys­tem, and re­forms for the po­lice and the armed forces, the sec­ond batch will co­in­cide with the first re­view of the bailout pro­gram, in­creas­ing the gov­ern­ment’s work­load in the com­ing weeks by a con­sid­er­able ex­tent.

The sec­ond batch will also in­clude all bank re­forms – on non­per­form­ing loans etc – which will al­low Greece to ac­cess the funds for the re­cap­i­tal­iza­tion of the credit sec­tor.

“All that will have to be com­pleted by Novem­ber 15, and a se­ries of of­fi­cials [in the EWG] have ex­pressed con­cern about how pos­si­ble that would be,” an of­fi­cial told Kathimerini. He added that yesterday’s meet­ing did not touch on the debt is­sue at all.

Sources say that Fi­nance Min­is­ter Eu­clid Tsakalo­tos wishes to in­clude some mea­sures in the draft bud­get to help poorer sec­tions of so­ci­ety in a bid to off­set the im­pres­sion from the al­ready known tax in­ter­ven­tions that will hurt Greeks. There­fore, this will con­cern mea­sures to sup­port mainly lower in­come groups.

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How­ever, there are prob­lems in any pol­icy change in that they re­quire pre­cise off­set­ting mea­sures, and most min­istries have not yet come up with any to avoid the im­po­si­tion of un­pop­u­lar in­ter­ven­tions. For in­stance, no mea­sures have been pro­posed to avoid the in­tro­duc­tion of a 23 per­cent value-added tax on pri­vate ed­u­ca­tion or cuts in mil­i­tary ex­pen­di­ture by 100 mil­lion eu­ros this year and 400 mil­lion in 2016.

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