ECONOMY

Worry over November measures

worry-over-november-measures

The Finance Ministry will make an effort to include some measures in the draft 2016 budget to be tabled on Monday to ease the burden on poorer sections of society, while the Euro Working Group on Friday confirmed the list of the first batch of prior actions that have to be voted by October 15 for the first subtranche of 2 billion euros to be disbursed.

The list of actions is very extensive, but EWG members expressed more concern about the second batch of prior actions that will follow, which is “particularly demanding.” Despite the difficulty of the measures, which include tax hikes on farmers, the main reforms in the pension system, and reforms for the police and the armed forces, the second batch will coincide with the first review of the bailout program, increasing the government’s workload in the coming weeks by a considerable extent.

The second batch will also include all bank reforms – on nonperforming loans etc – which will allow Greece to access the funds for the recapitalization of the credit sector.

“All that will have to be completed by November 15, and a series of officials [in the EWG] have expressed concern about how possible that would be,” an official told Kathimerini. He added that yesterday’s meeting did not touch on the debt issue at all.

Sources say that Finance Minister Euclid Tsakalotos wishes to include some measures in the draft budget to help poorer sections of society in a bid to offset the impression from the already known tax interventions that will hurt Greeks. Therefore, this will concern measures to support mainly lower income groups.

However, there are problems in any policy change in that they require precise offsetting measures, and most ministries have not yet come up with any to avoid the imposition of unpopular interventions. For instance, no measures have been proposed to avoid the introduction of a 23 percent value-added tax on private education or cuts in military expenditure by 100 million euros this year and 400 million in 2016.