Creditors to return to Athens after measures approved

Creditors to return to Athens after measures approved

Having passed a multi-bill of measures through Parliament, the government has now turned its attention back to foreign creditors who must approve the release of 2 billion euros in rescue loans and launch a critical review of Greece’s finances and reform progress.

Representatives of Greece’s lenders – the European Commission, the European Central Bank, the European Stability Mechanism and the International Monetary Fund – are expected to return to Athens on Tuesday to start a review that, Greece hopes, will end successfully, paving the way for the launch of talks on debt relief.

The auditors are to scour Greece’s finances too, following the presentation of the draft budget. Finance Minister Euclid Tsakalotos is expected to request flexibility, arguing that the recession estimates in the draft budget – 2.3 percent of gross domestic product this year and 1.3 percent next year – are overly pessimistic.

His aim is to eliminate some of the more contentious austerity measures that Greece has suspended, such as plans for a 23 percent value added tax on private schools and higher taxes on rental income.

As regards pension reform, another controversial issue, the government is keen to convince creditors to allow the inclusion of certain prior actions in a broader overhaul of the pension system, to come later.

As regards the 2-billion-euro loan tranche, the Euro Working Group is to convene on Wednesday and may recommend the immediate release of the money or may ask Greece to legislate more actions from the first list of prior actions.

The multi-bill approved by 154 coalition MPs early on Saturday included about a third of those measures, though Tsakalotos said they were adequate to secure the funding.

Prime Minister Alexis Tsipras is also bracing for a busy week, culminating with a visit to Athens by French President Francois Hollande on Thursday and Friday. Hollande, who is to address Parliament on Friday, will be traveling with seven top government officials and several French entrepreneurs.

A key aim is to test the potential for French involvement in Greece’s privatization program with Trainose and EYDAP among the assets drawing French interest.

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