Speaking to reporters in Athens on Tuesday, a Eurozone official said the Greek government has only carried out 30% of the 110 prior actions that need to be implemented in order to successfully conclude the latest review of the bailout program.
The official added that the fourth review – expected to go ahead in May-June 2018 – will see 82 key deliverables implemented. It is noted that Greece expects a little over 5 billion euros to be disbursed upon the conclusion of the 3rd review.
According to Greek media reports, the European official emphasized the need for the coalition government to push through key reforms, including: the auctioning of foreclosed properties; and the commencement of the Helliniko development project.
He added that the VAT rate that will apply to Aegean islands is still under discussion and there is “will on both sides to find a solution that will support the islands”.
On the pension cuts scheduled for 2019 and the lowering of the tax-free threshold penciled in for 2020, the official said these issues are tied to the talks set for May 2018 on whether or not the IMF will remain in the Greek program and the assessment of the entire bailout program at that moment in time.
Asked if Greece could suspend the measures if it manages to achieve a “clean exit” from the program next August, he said “we need people to stick to what has been agreed”. This statement shows that Greece will be asked to see through all agreed reforms, regardless of whether or not the IMF continues in the Greek program.
Finally, the same official revealed that debt talks will begin in February 2018 and lenders will decide if Greece is in need of fresh aid at the end of the 4th program review in May 2018.
In similar comments, the European Commission’s mission chief to Greece, Declan Costello, told a conference on Tuesday that there is much work still to do before the third review of the bailout program can formally be concluded. He pointed out that wrapping up the review by 22 January is crucial, in order to have ample time to discuss the post-bailout era.
Costello urged the Greek government to act quickly to implement agreed measures and reforms, adding that it is realistic to expect the conclusion of the current bailout program in mid-2018, providing that a political agreement is reached in January.
Meanwhile, Bank of Greece Governor, Yannis Stournaras said on Tuesday that the government should now turn its attention to swiftly concluding the 4th review of the bailout program too, in order to prepare the ground for a return to bond markets in August 2018.
Stournaras emphasized the need to push through agreed reforms and privatizations, improve the quality of independent authorities, deal with non-performing loans, gradually abolish capital controls and adopt growth-friendly fiscal policies. He also warned that high taxes pose a risk to economic activity.
The BoG chief also urged Greece’s creditors to clarify the post-bailout support that will be offered to Greece and the medium-term measures that will be taken to provide debt relief to the country.
“All the aforementioned actions will improve the investment climate, attract local and foreign direct investment and facilitate the return to financial normality and positive economic growth rates after years of sacrifice, recession and stagnation, which have adversely affected economic and social cohesion,” Stournaras said./IBNA