The International Monetary Fund’s envoy to Greece, Poul Thomsen, has told Kathimerini that the troika is not pushing for “horizontal measures” such as further cuts to salaries and pensions, but that structural reforms and a reduction of wasteful spending are necessary.
“We agree with the authorities that horizontal measures should be avoided,” Thomsen said in an interview published in Sunday’s Kathimerini, adding that he understood that “new fiscal measures are difficult politically and socially.” Any cutbacks should be “targeted carefully to protect the most vulnerable,” he said.
The IMF envoy insisted that a ban on foreclosures should be lifted at the end of the year but added, however, that the regulation was being exploited by some who can afford to meet their mortgage payments. He said there should be a system for protecting people who are at risk.
Thomsen also called for easing restrictions on collective dismissals in the private sector, noting that the changes would help curb unemployment by encouraging companies to open without fears that they cannot dismiss their staff if things do not work out.
A stalled overhaul of the civil service must continue, Thomsen said, noting that it is still “taboo to talk about laying off non-performing workers.”
Overall Thomsen said Greece has made “enormous progress in restoring fiscal sustainability,” adding that the country is on target to post a primary surplus “which is a major milestone.” Asked why talks with the troika were dragging, he cited “an unusually large number of complex issues,” including a new property tax. As for Greek banks, they have been “fully recapitalized.”