Greece Commits to Post-Bailout Actions



Greek PM Alexis Tsipras’ government has committed to five urgent actions to follow the bailout exit.

Greece has committed to five important fiscal actions for after the end of the bailout program in August, while the new omnibus bill to be ratified in parliament on Thursday includes some relief measures for taxpayers.

According to a Kathimerini newspaper report citing a government source, Athens has committed to the five actions since there is no time until August.

Creditors have demanded that Athens complete a privatization program, with priority given to the former airport project at Elliniko. The government also has to complete public administration reform.

Greece must also proceed with further liberalization of its energy market and implement new market reforms in products and services. Finally, red loans must be reduced to €60 billion ($70.7 billion) by the end of 2019.

According to the Kathimerini report, the above reforms, as well as the achievement of the primary surplus targets of 3.5 percent of GDP by 2022, will be the main subject of the “enhanced surveillance” in the post-bailout program period until 2022.

The Ministry of Finance estimates that the new pension cuts as of Jan. 1, 2019 and the lowering of the tax-free income threshold on Jan. 1, 2020 will add about €5 billion and €2 billion respectively to the State coffers in the 2019-2022 period. It is expected that primary surpluses will reach 5.19 percent in 2022.

At the same time the Greek government promises that in the medium term, excess surpluses over 3.5 percent of GDP will be allocated for tax cuts and social spending.

Thus, for 2018, Prime Minister Alexis Tsipras has already announced, about €700 million is earmarked for tax cuts. Then, in 2020, when the surplus will reach €1.3 billion, 75 percent of that will go to tax relief measures and 25 percent to social spending.