Greece Must Legislate 2nd Package of Prior Actions by December 11

eurogroup-genikiThe Greek government has a December 11 deadline to legislate the second package of prior actions in order to receive a tranche of 1 billion euros in financial aid, a European Union official said.

The December 7 Eurogroup will discuss the progress of the Greek program, among other issues. Under condition of anonymity, a EU official said that Greece will be given a short deadline to legislate the second package of prior actions required for the 1-billion-euro loan tranche.

The second package of prior actions includes the plan for a new independent secretariat of public revenue, settlement of ‘red’ business loans, privatization of the Independent Power Transmission Operator (ADMIE), new household bankruptcy legislation, legislation for a new independent privatization fund and evaluation and restructuring of public sector of wages among other actions.

The European official said that if Greece fails to complete the requirements by December 11, the 1 billion euros will not be “lost.” It will go to the total financial aid package to be disbursed later as Greece completes the first official evaluation of its bailout program.

Due to the Christmas season, the first official evaluation is not likely to take place before February 2016.

According to the EU official, the first evaluation will not be completed unless the thorny issues of security fund restructuring and farmers taxation are legislated and implemented. The former includes pension cuts and increases in retirement age, while the latter includes higher taxes for farmers and abolition of several tax benefits.

As for Greek debt issue, the EU official said that the consensus among Eurozone members is that there is no need for a haircut but the debt can be restructured.