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Greece's Creditors Postpone Bailout Program Evaluation

troika-1Creditors have rejected Greece’s proposal on security fund reforms, thereby setting further back the date of the evaluation of the progress of the bailout program.
“We asked for a cow and they sent us a cat,” said a representative of one of Greece’s creditors on conditions of anonymity when asked to comment on the 170-page Greek proposal.
The comment reflects the differences between what lenders want and what the Greek government proposes. According to a European Union official, more data and figures are needed and it is likely that they will ask for more pension cuts and further changes in the security funds system.
Despite the Greek government’s hurry to complete the evaluation so that negotiations on Greek debt easing commence, it is unlikely that the evaluation will take place soon. The heads of the quartet of representatives of Greece’s lenders – the European Commission, European Central Bank, European Stability Mechanism and International Monetary Fund – were expected to arrive in Athens early this week. However, their arrival has been postponed. Only the technical teams will continue talks with the Greek team.
At the moment, pension cost in Greece stands at 16.2 percent of GDP. The IMF insists that the figure must be drastically reduced both as a percentage of GDP and in absolute numbers, so that the pension system becomes viable.
Other than security fund reforms, Greece has several other issues that are pending. The new income tax code, tax exemptions, value added tax on islands and tax scales for 2016 are among the tax issues that are still under negotiation. Also, objective values on real estate properties, single property tax (ENFIA) values and rent taxation are still pending.
The Greek government also has to fill the post of the General Secretary for Public Revenue, with the lenders insisting that the position is not political.
Finally, the issue of the establishment of an independent privatization fund must be resolved soon as a crucial requirement of the bailout program.

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