Gov­ern­ment mulling dif­fi­cult com­pro­mise

Kathimerini English - - Front Page -

The gov­ern­ment is keep­ing its cards close to its chest over the steps it will take un­til Mon­day, when the In­ter­na­tional Mon­e­tary Fund pub­li­cizes its re­port on the sus­tain­abil­ity of Greece’s debt.

De­spite the fact that ne­go­ti­a­tions with cred­i­tors have picked up again on all lev­els, Greece’s eco­nomic team is re­port­edly wait­ing for the IMF re­port, and the re­ac­tion to it by the Euro­pean in­sti­tu­tions, to act ac­cord­ingly.

At the same time, the gov­ern­ment is also bank­ing on the po­lit­i­cal di­men­sion of the ne­go­ti­a­tions, be­gin­ning with the meet­ings Prime Min­is­ter Alexis Tsipras will hold to­day on the side­lines of the in­for­mal Euro­pean Union sum­mit in Malta.

Ac­cord­ing to re­ports, the gov­ern­ment is work­ing on a pack­age of com­pro­mise mea­sures on the con­di­tion that the IMF backs down from its de­mand for mea­sures worth 4.6 bil­lion eu­ros. This could be a likely sce­nario given that the fis­cal tar­gets of 2016 were sur­passed.

Sources say the gov­ern­ment in re­turn – and on the fur­ther con­di­tion that the cred­i­tors do not in­sist on dras­tic changes to la­bor law – would con­sider leg­is­lat­ing now some of the mea­sures that it is be­ing asked to im­ple­ment. These in­clude re­duc­ing the tax thresh­old for in­comes in 2018. Un­der this scheme, the other de­mands made by cred­i­tors, such as pen­sion cuts, would pass on to the au­to­matic fis­cal mech­a­nism known as the “cut­ter,” which will be ac­ti­vated if Greece fails to meets its fis­cal tar­gets.

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