The two mechanisms for the settlement of debts to the tax authorities and the social security funds will be a sizable challenge for the next government. Greece’s creditors estimate that the 120-tranche payment programs will create a fiscal gap of 0.6 percent of gross domestic product in the 2019 budget that risks missing the target of 3.5 percent of GDP.
The biggest problem is in the mechanism for the tax debts, where the creditors expect a gap of 600 million euros, plus another hole of 300 million in the settlement scheme for debts to the social security funds. In contrast, the Finance Ministry estimates there will be a benefit of over 200 million euros from debt settlements.
Up until Tuesday 90,000 tax debtors had joined the 120-tranche mechanism, for the settlement of dues of 648 million euros plus fines of 184 million, but it is unknown how much of that will reach the state coffers.