Greece Still Faces Painful Reforms Despite Bailout Funding



Eurogroup meeting (file photo)

Monday’s Eurogroup meeting concluded that the Greek government needs to implement  88 prior actions for its third bailout review to be completed, 15 of which remain outstanding.

Among the most painful of the actions in the list presented to the government is the provision of a further cutback of the lowest tax-free income in case Greece’s lenders conclude that the primary surplus of 3.5 percent of GDP is unattainable in 2019.

According to deliberations from Monday’s crunch Eurogroup meeting, Athens still needs to implement 15 prior actions of the bailout terms, so that the approved €5.7 billion ($6.9 billion) tranche can be dispersed in February.

An additional €1 billion bailout tranche for the payment of outstanding state debt has been approved and will be dispersed in April or May, said eurozone finance ministers.

Apart from a potential cutback of the lowest tax-free income, the unfulfilled actions also include a recalculation of the property tax (ENFIA) codes, so that a deficit caused by crisis-induced lower property values can be addressed.

Others include the abolition of the lower-VAT status for the remaining five Aegean islands, a further cutback in state medical expenses and the conclusion of the privatization process of the Hellenikon airport in Athens and other projects.

Most of these unpopular prior actions do not need to be presented for a vote in the Greek parliament, thus causing friction among lawmakers but will prove politically painful for the government.