More mea­sures may be ahead

Top of­fi­cial vows to stick to bailout, even if it brings more aus­ter­ity, says ‘clean exit’ might not be pos­si­ble

Kathimerini English - - Front Page -

Greek author­i­ties will honor their com­mit­ments as laid out in the lat­est loan deal with in­ter­na­tional cred­i­tors, even if this re­sults in the need for ad­di­tional aus­ter­ity mea­sures next year, a top govern­ment of­fi­cial in­di­cated yes­ter­day.

In an un­usual show of hon­esty and re­al­ism, the same of­fi­cial sug­gested that there might not be a “clean exit” for Greece af­ter its third bailout ex­pires next sum­mer but some­thing more re­stric­tive. There are a range of pos­si­ble sce­nar­ios be­tween that of a clean exit, which Prime Min­is­ter Alexis Tsipras has her­alded, and the prospect of a credit line for Greece, the of­fi­cial said.

On the prospect of more aus­ter­ity next year, the of­fi­cial said he be­lieved that there would not be a big di­ver­gence in fis­cal tar­gets next year. “If there is, we’ll see what hap­pens, but were are com­mit­ted to a tar­get of 3.5 per­cent of gross do­mes­tic prod­uct,” the of­fi­cial said, re­fer­ring to the pri­mary sur­plus goal set by cred­i­tors.

The of­fi­cial also noted that, once a pri­mary sur­plus tar­get is reached, resid­ual rev­enue will go to­ward boost­ing the So­cial Sol­i­dar­ity In­come pro­gram for 2017 for Greeks who have been hard­est hit by aus­ter­ity but also to­ward pay­ing off state debts to the pri­vate sec­tor and to growth pro­grams.

De­ci­sions on th­ese mat­ters are ex­pected to be taken fol­low­ing talks with the mis­sion chiefs rep­re­sent­ing Greece’s for­eign lenders, who are ex­pected to travel to Athens next month and to as­sess the progress of author­i­ties in boost­ing tax col­lec­tion and curb­ing spend­ing.

Although Greek of­fi­cials have un­der­lined the im­por­tance of com- plet­ing the next bailout re­view by the end of the year, sources sug­gest that the process might drag into Jan­uary.

The most im­por­tant thing, the of­fi­cial noted, is “that we are not part of the prob­lem” when im­por­tant dis­cus­sions about the fu­ture of the Greek pro­gram get un­der way in the first quar­ter of next year, touch­ing on the par­tic­i­pa­tion (or not) of the In­ter­na­tional Mon­e­tary Fund in Greece’s third bailout and re­lief for the coun­try’s debt bur­den.

Greek author­i­ties are con­cerned about the IMF’s stance op­po­site Athens. Apart from the Fund’s tra­di­tion­ally tough po­si­tion on fis­cal mat­ters, there are con­cerns too about its de­mands for a fur­ther re­cap­i­tal­iza­tion of Greek banks. The of­fi­cial, how­ever, as­sumed the stance of the Euro­pean Cen­tral Bank on this is­sue, not­ing that there is no need for Greek banks to re­ceive fur­ther cap­i­tal.

The of­fi­cial said that Greece planned to tap in­ter­na­tional bond mar­kets in the next 6-9 months fol­low­ing a suc­cess­ful re­turn in July.

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