NEWS

Pace of preparations for January reforms due to pick up

TAGS: Politics, Economy, Euro

Greece’s lenders are hoping to see the government step up its preparations for the return of the institutions to Athens in mid-January for the first review of the current bailout program.

Until Christmas, the coalition’s attention had been fixed on passing the required prior actions through Parliament to ensure that the loan sub-tranches were disbursed.

According to the quadriga of the International Monetary Fund, the European Commission, the European Central Bank and European Stability Mechanism, this means that the preparation for the next batch of reforms did not progress as much as it should have.

The lenders, however, expect that there will be a more intensive exchange of ideas in the coming weeks, ahead of the quartet’s planned return on January 18.

The institutions expect to hear the government’s proposals on pension reform, for instance. Athens has yet to set out the measures it foresees for saving some 1.8 billion euros, or 1 percent of gross domestic product. The coalition has so far been concentrating on increasing social security contributions and Prime Minister Alexis Tsipras has pledged not to cut main pensions.

Tsipras has also said he would like the pension reform legislation to be submitted to Parliament by January 15.

Greece and its lenders will have to agree on tax reform too, with the aim of raising an extra 150 million euros in revenues. More than 30 million euros of this is due to come from extra taxation for farmers, which the agricultural sector has already been protesting about.

Another issue on the agenda is the fiscal measures that will be needed for the next three years. Sources told Kathimerini that the institutions believe some 900 million euros in new measures will be needed in 2016 alone.

This is all expected to increase the political pressure on the government, but State Minister Nikos Pappas insisted that the coalition’s three-seat majority is not at risk.

“The SYRIZA-Independent Greeks government is strong and will remain so,” he told Real News in an interview.

“The country is stabilizing, the recession is disappearing, the banks have been recapitalized, the installment is being disbursed without problems and the measures will be voted in the first weeks of January,” he added.

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