Gov­ern­ment in­sists no more aus­ter­ity needed

Athens re­buffs re­ports that more tax, pen­sion hikes are in store as IMF re­peats stance on bud­get tar­gets

Kathimerini English - - Front Page -

Gov­ern­ment spokesman Dim­itris Tzanakopou­los yes­ter­day in­sisted that a drag­ging bailout re­view would be com­pleted in the com­ing weeks with­out any need for Greece to im­pose fur­ther aus­ter­ity mea­sures.

“Il­log­i­cal de­mands and de­mands that fall out­side the ex­ist­ing agree­ment will not be ac­cepted,” Tzanakopou­los told re­porters at a weekly brief­ing.

The spokesman ex­pressed con­vic­tion that an agree­ment on the na­ture of the medium-term mea­sures for re­liev­ing Greece’s debt bur­den would be ad­e­quate to con­clude the re­view. He re­buffed re­ports sug­gest­ing that ad­di­tional in­creases in value-added tax, fur­ther cuts to pen­sions and a re­duc­tion of the tax-free thresh­old will be needed.

The key ob­sta­cle to the con­clu- sion of the re­view is po­lit­i­cal in na­ture, not tech­ni­cal, he said, ap­par­ently re­fer­ring to the fact that the role of the In­ter­na­tional Mone­tary Fund in the pro­gram – whether it will be es­sen­tial or tech­ni­cal – has yet to be de­ter­mined. In com­ments yes­ter­day, IMF spokesman Gerry Rice re­peated the Fund’s stance, ac­cord­ing to which ad­di­tional mea­sures must be taken un­less an ex­ist­ing pri­mary sur­plus tar­get of 3.5 per­cent of gross do­mes­tic prod­uct for 2018 is re­duced to 1.5 per­cent of GDP.

A meet­ing of euro­zone fi­nance min­istry of­fi­cials yes­ter­day was not ex­pected to yield any break­through and many be­lieve that a Eurogroup meet­ing sched­uled for Jan­uary 26 is un­likely to pro­duce any con­crete re­sults ei­ther.

Ac­cord­ing to sources, Greece’s new dead­line is March 9, when the Euro­pean Cen­tral Bank’s Gov­ern­ing Coun­cil is set to con­vene and make a de­ci­sion on whether Greece qual­i­fies for in­clu­sion in its quan­ti­ta­tive eas­ing scheme.

As Prime Min­is­ter Alexis Tsipras has re­peat­edly de­clared that debt re­lief and QE will be re­wards for his gov­ern­ment’s ef­forts, there are fears that fail­ure to se­cure them could put his ad­min­is­tra­tion on shaky ground.

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