Eurogroup urges Greece to implement bailout reforms promptly

Eurogroup urges Greece to implement bailout reforms promptly

Athens, October 6, 2015/ Independent Balkan News Agency

By Zacharias Petrou

Greek Finance Minister Euclid Tsakalotos met with his Eurogroup counterparts in Luxembourg on Monday to discuss the tough measures Greece must enforce as part of its bailout deal. Alternate Finance Minister Giorgos Chouliarakis also took part in the meeting.

Tsakalotos submitted the draft budget for 2016 to Parliament on Monday, the details of which along with dozens of austerity measures Greece must legislate in the coming weeks, were discussed at the Eurogroup summit.

The new budget includes the abolition of certain tax breaks as well as increases in taxation and a tightening of laws on tax avoidance and evasion. The highly unpopular property tax is maintained (“ENFIA”), aiming at raising EUR 2.65 billion euros.

The economy is expected to stay in recession, shrinking by 2.3% this year, 0.5% in 2016 before returning to growth in 2017.

Greece must push through parliament a list of the 48 Prior Actions Greece must implement by Oct 15 in order to receive the next tranche of its bailout cash (2+1 billion euros).

More measures will need to be adopted by mid-November.

French Finance Minister Michel Sapin gave Greece much incentive to successfully see the measures adopted.

“The sooner the agreement is implemented, the sooner the creditors can look at easing the debt burden, a step that must be completed before the International Monetary Fund can provide further financing to Greece”, Sapin said on Monday.

“We want to see determination to meet commitments under the July agreement and within the right timeframe” the French minister added.

“A lot of work has to be done,” said Jeroen Dijsselbloem, the Eurogroup president. “It’s in the Greek interest to deliver as quickly as possible.”

Following the discussion on Greece which lasted about 20 minutes, Dijsellbloem added that Greece must enact most of its promised reforms before creditors can also start discussing how to lighten the country’s debt load.

“The next set of milestones to unlock the final one billion will have to be worked on with great urgency and agreed later in October. We asked the institutions and the Greek authorities to complete the work as hard as possible to be able to conclude the first review as fast as possible,” he said in a press conference following the meeting.

The Eurogroup president also revealed that the European Central Bank is assessing the state of the Greek banks and noted that the recapitalization of the country’s banking system will take place from November to December.

“There are one or two points which are delayed by the elections,” said Austrian Finance Minister Hans Joerg Schelling. “I believe Greece at the moment is on track, as far as the implementation goes.”

Wolfgang Schaeuble, the German finance minister, also appeared conciliatory on his arrival at the Eurogroup meeting.

“It’s a little early to talk about delays. Rather, we will naturally await the first report and then we’ll see,” Schaeuble said.

The first full evaluation of Greece’s program by the troika should be completed by November 15 as it is a prerequisite for the disbursement of the additional 15 billion euros provided in the July 12 agreement for the recapitalization of banks – an issue that is a top priority for the Greek government in order to avoid a bail-in.