Finance Minister Euclid Tsakalotos admitted that Greece’s poor will not benefit from the new measures and that Tuesday’s Eurogroup outcome was not as good as it was hoped.
Tsakalotos and Deputy Finance Minister Giorgos Chouliarakis gave a press conference in order to present the results of the May 24 meeting of euro zone finance ministers. Also, on Thursday evening they had a teleconference with creditors’ representatives in order to sort out pending details.
There were some unresolved issues in Tuesday’s Eurogroup that need to be completed in order for the next loan tranche to be disbursed. Specifically, creditors ask that bad loans that are guaranteed by the Greek government should be sold to distress funds and that 90,000 undeserved supplementary pensions should be abolished.
Tsakalotos said the government will try to save the 90,000 pensions with alternative measures, such as reimbursing the 90,000 pensioners from a new social solidarity fund where the money from primary surpluses will be going.
The finance minister also said that the measure that requires a rise in prices of heating fuel will be replaced by an alternative measure, but that can only happen in 2017.
Tsakalotos admitted that, “the package of measures is not helping the poor who can hardly get by” and that “we didn’t do the best we could, we accepted a lot (of austerity measures), but we didn’t accept others, such as a haircut on security funds.”
However, Tsakalotos said, Greece achieved a lot, specifically,
a) This was the first Eurogroup where it was officially recognized that the Greek debt is not sustainable.
b) For the first time it was established when it is necessary to take measures for easing the Greek debt: when debt repayments exceed 15%-20% of GDP.
The Greek debt will be analyzed again after 2018, when the bailout program is completed. The debt relief measures will be short, medium and long term and a cut-off mechanism will be established in order for the debt to become sustainable in the long term.
Until 2018, Greek debt will be below the cut-off limit of 15% of GDP for repayments. In 2020, it will exceed slightly the 15% limit. In 2029 it will be at 20%, in 2040 at 30% and in 2060 at 60%.
“Our aim is to slowly start borrowing from the markets in 2017. We will not try to do it fast, like the previous government, but by establishing trust first,” Tsakalotos underlined.
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