The Brussels Group, technical teams from Greece and its lenders, is on Saturday due to begin discussing the details of Athens reform proposals, which were completed Friday and will determine to a large extent whether creditors decide to release further bailout funding.
The government is hoping that the technical teams will wrap up their negotiations by Monday and that a Eurogroup meeting will be called at some point next week to approve the disbursal of at least some of the remaining 7.2 billion euros in bailout funding to Greece.
A high-ranking Finance Ministry official insisted that none of the measures proposed by the Greek side would be “recessionary.” Instead, the government is looking to raise some 3 billion euros without having to cut pensions or wages.
Among the measures being proposed are an increase in luxury tax, special consumption tax on alcohol and a series of measures aimed at improving tax collection and targeting tax evaders, sources said. Other revenue-raising measures include the issuing of broadcasting licenses and a scheme to electronically connect the cash tills of retail stores, restaurants and bars with the Finance Ministry.
The government is forecasting that growth will reach 1.4 percent of gross domestic product this year and that the primary surplus will hit 1.5 percent of GDP, according to sources.
However, a number of issues seem to be open ahead of the Brussels Group discussion. These include whether the coalition will make any changes to value-added tax, if it will keep the ENFIA property tax and whether there will be any further pension reform.
Expectations on the lenders’ side for a swift conclusion are low. A person with knowledge of the process said that progress has been slow over the past few days and that there appears to be a difference of opinion over how much of the previous program should be retained.
Athens, meanwhile, denied it has plans to stop repaying its debt after a non-paper issued by the government suggested it would keep paying wages and pensions even if that leaves it with no money to pay creditors. The government said that the non-paper simply highlighted the points made by Prime Minister Alexis Tsipras to European leaders over the last few days.