ECONOMY

Next EU-IMF test coming up

Representatives of the International Monetary Fund, European Commission and European Central Bank (ECB) will be visiting Athens this coming Monday in a bid to spot any risks that could threaten to destabilize the budget in the second half of the year and jeopardize steps made by the government so far. The representatives of the three bodies – commonly referred to in the press as the «troika» – believe that the government has been progressing well, slightly beating initial targets set in the memorandum recently signed with Greece. During their visit they intend to discuss the introduction of monthly budgetary goals with the government in order to achieve better monitoring of its fiscal policy. In Parliament yesterday, Finance Minister Giorgos Papaconstantinou said the second and third installments of the rescue plan have received the green light. He also said the government will need to prove to the visiting officials that it is committed to the implementation of reforms pledged in 28 different fields. Before release of the funds for the second installment, the troika will visit Athens at the end of July to put together an update on the progress made by the government. However, on their visit this week they will concentrate on seven gray areas that could hide spending and revenue traps for the budget. Among the areas on which they intend to focus will be a freeze on taxes that need to be returned to taxpayers. In the first five months of the year, the government has paid 1.7 billion euros in tax rebates but has also held back another 420 million euros owed. Another crucial area of focus will be the social security system. Primary budget expenses may have been contained so far but the financing of pension funds remains a «time bomb» for the state budget. Most pension funds have received a large part of the funding they are entitled to for all of 2010, one example being the fund OAEE, which insures the country’s self-employed and has received 65 percent of its 2010 budget, while the Social Security Foundation (IKA) has been given 40 percent of its annual cut from the state budget.