NEWS

PM, FinMin in bid to muster party support for bill

TAGS: EU, Economy, Politics

Prime Minister Alexis Tsipras and Finance Minister Euclid Tsakalotos are to spend the next few days trying to overcome the objections of SYRIZA MPs to aspects of a second round of austerity measures that is to go before a vote later this week.

Tsipras chaired a meeting with his close aides and key ministers on Monday and discussed the measures to be included in the bill – a new privatization fund, new regulations for the sale of nonperforming loans held by Greek banks and a slew of new tax increases including hikes for heating oil, coffee and alcohol worth 1.8 billion euros in budget savings.

Officials also discussed an automatic mechanism for cutting state spending that creditors want Greece to activate if it misses budget targets. The decision on whether or not to activate the mechanism would be taken every April after Eurostat, the European Union’s statistics service, publishes its macroeconomic data.

Greek officials are keen to ensure that salaries and pensions would be kept out the mechanism’s reach, as further trimming would be politically toxic for a government that only last week pushed through new pension cuts and tax hikes.

Tsipras is to chair a session of SYRIZA’s parliamentary group on Tuesday to discuss the measures, and the mechanism, in more detail. Tsakalotos will be tasked with overcoming the objections of members of SYRIZA’s Group of 53, a radical faction within the party to which he belongs.

Opposition parties have indicated that they will vote down the multi-bill overall but conservative New Democracy has said it might support plans for a new privatization fund and the new rules for NPLs.

A multi-bill bundling together the provisions for a privatization fund, NPL rules and the new taxes is expected to be submitted in Parliament by Wednesday evening before a vote which will likely be held on Sunday ahead of a meeting of eurozone finance ministers next Tuesday.

Assuming the bill passes into law without major losses for the ruling coalition, the Eurogroup is expected to give the green light for the release of some 10 billion euros in rescue loans, half to cover debt repayments and the rest to repay state arrears to the private sector.

Less clear are the prospects for a settlement regarding Greece’s debt. Eurozone countries and the International Monetary Fund remain split about the approach that should be taken, with the IMF favoring an immediate restructuring of Greece’s debt while eurozone finance ministers would prefer such an overhaul to be carried out on the completion of Greece’s bailout, in 2018, and subject to authorities hitting targets.

Online