Cut­ter’s jaws could be widened

Gov’t con­sid­ers in­clu­sion of tax-free thresh­old, pen­sions in re­vised plan for ac­ti­va­tion of fis­cal mech­a­nism

Kathimerini English - - Focus - BY SOTIRIS NIKAS

In its ef­forts to reach a com­pro­mise with the cred­i­tors for the com­ple­tion of the sec­ond bailout re­view, the gov­ern­ment is ex­am­in­ing a sce­nario whereby the au­to­matic fis­cal mech­a­nism agreed last year (aka “the cut­ter”) would also in­clude the re­duc­tion of the tax-free thresh­old and pen­sions. The cut­ter forces the Greek gov­ern­ment to take cor­rec­tive ac­tion if it fails to meet its fis­cal tar­get.

How­ever, the sce­nario does not pro­vide for the quan­tifi­ca­tion of those par­tic­u­lar mea­sures or their in­tro­duc­tion into leg­is­la­tion in ad­vance, as the In­ter­na­tional Mone­tary Fund is de­mand­ing.

Sources say the Fi­nance Min­istry has not ruled out the pos­si­bil­ity of in­clud­ing the above mea­sures in the con­text of ex­tend­ing the cut­ter be­yond 2018. The fi­nal text will also de­scribe a process to sim­plify the acti- va­tion of the mech­a­nism. The gov­ern­ment has not yet de­ter­mined the plan in all its de­tails. How­ever, this is sup­posed to con­sti­tute a good­will move by Athens to un­lock the ne­go­ti­a­tions and go some way to­ward sat­is­fy­ing the IMF’s de­mands.

Min­istry of­fi­cials make it clear the gov­ern­ment has no in­ten­tion of pro­ceed­ing with the leg­is­la­tion of mea­sures in ad­vance, as the Fund de­sires, and cite the ac­knowl­edge­ment of Eurogroup head Jeroen Di­js­sel­bloem that such a move would con­tra­vene the Greek Con­sti­tu­tion.

Such is the ex­tent of the prob­lems in ne­go­ti­a­tions with the coun­try’s cred­i­tors that Greece is not ex­pect­ing any more from to­mor­row’s Euro Work­ing Group meet­ing than the de­ter­mi­na­tion of a timetable for the next moves re­quired to con­clude the sec­ond bailout re­view.

There­fore the min­istry does not ex­pect the re­view to be fin­ished within Jan­uary, al­though La­bor Min­is­ter 1.0567 Effie Acht­sioglou said yes­ter­day the process will be fin­ished by the month’s end. The Fi­nance Min­istry’s new tar­get is Fe­bru­ary 20, when next month’s Eurogroup meet­ing is sched­uled for.

It is in this con­text that min­is­ter Eu­clid Tsakalo­tos is meet­ing his French coun­ter­part Michel Sapin in Paris to­day, be­fore hold­ing talks with Euro­pean Com­mis­sioner for Eco­nomic Af­fairs Pierre Moscovici to­mor­row in Brus­sels.

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