ECONOMY

Distance remains between all parties on fiscal measures Greece needs to take

distance-remains-between-all-parties-on-fiscal-measures-greece-needs-to-take

The heads of the creditors’ missions to Greece return to Athens on Tuesday, just over a month after their departure. They will resume the bailout review on Wednesday, with the aim of reaching a conclusion as early as possible. Still, the differences that existed before the representatives last left Greece have not been eliminated.

The biggest stumbling blocks in the talks concern the coverage of the fiscal gap up to 2018, the social security reform, changing the tax system, the management of nonperforming loans, the setup of the new privatizations hyperfund, and the independence of the General Secretariat for Public Revenues.

None of the estimates made by the eurozone, the International Monetary Fund and the Greek government as regards the fiscal gap concur. The IMF insists that for the primary surplus target of 3.5 percent of gross domestic product by 2018 to be attained, the government must take extra measures worth 7.5-9 billion euros. The European Commission puts this requirement at 5.5 billion euros, while Athens considers the figure to be much smaller, at around 1.8 billion euros.

The IMF discerns many risks in the implementation of the fiscal measures taken and those that Greece has committed itself to taking, and in order to ensure that the targets are met (for the Greek debt to be sustainable) it is asking for several new measures.

Such is the lack of consensus on the fiscal front that the IMF says 2015 closed with a primary deficit of 0.6 percent of GDP, while the government says there was a primary surplus of 0.2 percent, a view the Commission does not openly dispute.