Gov’t faces a moun­tain of work

With a bar­rage of mea­sures to en­force and with cof­fers run­ning dry, PM seek­ing sup­port of Hol­lande in talks

Kathimerini English - - Front Page -

Af­ter a first round of talks with en­voys rep­re­sent­ing Greece’s cred­i­tors failed to es­tab­lish vir­tu­ally any com­mon ground, the gov­ern­ment must this week push ef­forts to honor com­mit­ments linked to its third bailout as state cof­fers are start­ing to empty again.

With so many of the prior ac­tions pledged to cred­i­tors pend­ing, it ap­peared un­clear whether the gov­ern­ment would make enough progress this week to se­cure the re­lease of a first tranche of 2 bil­lion eu­ros in loans. But of­fi­cials are al­ready un­der pres­sure to com­pile a sec­ond bill fea­tur­ing tough mea­sures in­clud­ing in­creases to taxes on farm­ers and an over­haul of the pen­sion sys­tem; the sec­ond bill is linked to an­other slice of 1 bil­lion eu­ros in loans.

The two sides have dif­fer­ing opin­ions on sev­eral is­sues, how­ever, in­clud­ing on whether and how to im­pose a value-added tax on pri­vate ed­u­ca­tion, on a law al­low­ing debtors to honor their dues in a larger num­ber of in­stall­ments and on fore­clo­sures in­volv­ing pri­mary res­i­dences. An­other stick­ing point is the bud­get for next year: the cred­i­tors are not con­vinced that the mea­sures Greece is propos­ing will meet fis­cal tar­gets.

Ac­cord­ing to sources, Prime Min­is­ter Alexis Tsipras asked French Pres­i­dent Fran­cois Hol­lande to in­ter­vene in the talks. Hol­lande is said to have in­di­cated his readi­ness to help, Kathimerini un­der­stands. Dur­ing his visit to Athens last week, Hol­lande sug­gested that there should be more dis­cus­sion about the thresh­old for fore­clo­sures. Ber­lin might not wel­come any at­tempt to seek con­ces­sions. Also, there are fears that de­lays could re­vive the risk of a hair­cut on bank de­posits. If Greece’s banks are not re­cap­i­tal­ized be­fore the end of the year, new Euro­pean rules on bank bailouts, com­ing into ef­fect on Jan­uary 1, mean de­posits of over 100,000 eu­ros can be tapped. Be­fore Greek banks can be re­cap­i­tal­ized, how­ever, Greece must un­dergo a re­view by cred­i­tors and that can only be done once both sets of prior ac­tions have been leg­is­lated.

Mean­while, state cof­fers are run­ning low. This comes as the draft bud­get for 2016 in­di­cates that author­i­ties are hardly cut­ting spend­ing, re­ly­ing al­most en­tirely on tax in­creases to achieve bud­get tar­gets. The draft points to only 214 mil­lion eu­ros in cuts to pri­mary ex­pen­di­ture while aim­ing to raise more than 2 bil­lion eu­ros from value-added tax in­creases alone.

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