Greece to miss tranche deadline

Reshuffle and closure of Parliament mean postponing implementation of prior actions beyond June 13 By Prokopis Hatzinikolaou

It seems highly unlikely that Greece’s next sub-tranche of 1 billion euros will be approved before the next Eurogroup meeting as the upcoming government reshuffle and a decision to end the parliamentary season have made it virtually impossible to implement the prior actions required in time.

According to the deadlines chart set by the country’s creditors, the government would need to have everything completed by June 13, the date of the Euro Working Group meeting, for the disbursement of the 1 billion euros to be approved.

However the unexpected early closure of Parliament and the start of the summer sessions from June 17 will effectively halt the submission and voting of bills included in the prior actions. A senior Finance Ministry official told Kathimerini on Wednesday that if Athens cannot fulfill all the prior actions needed by June 13, then this will happen by the next Eurogroup meeting in July, by which time all requirements will have been met.

In the meantime the Greek state has sufficient cash reserves for now, but problems will start to arise after July, as Greece will need to pay 7 billion euros for maturing bonds and other obligations in August.

The main problem is with the bill for the zoning plans, which will apparently be passed over to the Parliament’s summer sessions. Another issue that will remain pending beyond June 13 is the further reduction of pharmacists’ profit margins: From the original 19 percent, the rate has dropped to 17 percent, according to Health Ministry officials, but the revised bailout agreement provides for a reduction to just 15 percent. However the government is not ready to submit a bill to that end as it does not want to open another front with the pharmacists. The government has already started talks with the the pharmacist’ union to find a solution, but the country’s creditors have not been informed of that and it is not known whether they will give their consent.

A third outstanding issue is the splitting of the Public Power Corporation for the creation of the so-called “Small PPC,” which will be privatized. This could test the coalition government’s cohesion in Parliament.