NEWS

Moscovici advises on way forward as Athens seeks deal

TAGS: Diplomacy, Economy

European Economic Affairs Commissioner Pierre Moscovici, who visited Athens on Wednesday, is expecting the Greek government to make specific steps towards reaching a consensus with lenders by Monday’s Eurogroup.

Responding to a question from Skai TV following his meetings in Athens, Moscovici said he discussed with Prime Minister Alexis Tsipras what steps Athens needs to take. The commissioner did not go into any detail about his conversation with the Greek leader but added that Tsipras would have to think of what counter-proposals he should make.

The government has accepted that in order to reach an agreement with is lenders it will have to give in to their demands for the lowering of the tax-free threshold and reductions to pension spending. However, the coalition wants this to form part of a package that will include counter-balancing measures that will help make the agreement seem more attractive to coalition MPs and voters.

Athens would like the lenders to agree to the government being able to adopt certain measures if it beats fiscal targets. These include lowering value-added tax, cuts to taxation for small- and medium-sized enterprises, a reduction in the ENFIA property tax and increases in social spending.

Another element Athens wants to form part of a comprehensive package is, at the very least, a roadmap for medium-term debt relief measures and primary surpluses, which would be enough to secure participation in the European Central Bank’s QE program.

It is not clear if there is enough time for all this to be agreed by Monday, allowing the institutions to return to Athens so they can wrap up the review swiftly.

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