Greece’s Creditors Reject Irreversible Fund But Work on Incentives to Legalize Hidden Assets



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The first week of talks between Greece and creditors failed to prefer concrete results. The government’s efforts for the creation of a “special irreversible bank account” have been futile after representatives of Greece’s creditors (European Commission, European Central Bank, European Stability Mechanism, International Monetary Fund) put an end to the notion. The plan foresaw the creation of a special account for salaries, payments to suppliers of public procurements, contributions, etc. but was rejected by creditors despite the fact that it was part of the central announcement of Prime Minister Alexis Tsipras.

Other matters Tsipras had touted included the granting of social security clearances through the “freezing” of past business debts provided that current debts are paid.

The two sides, however, are close to an agreement regarding the voluntary disclosure of income. Sources state that the process would concern a high tax contribution (60 percent including fines) for those who take advantage of the arrangement. Such an incentive may help people legalize hidden income, however, there is still disagreement in the way that such an account would operate.

On another level, Greece and its foreign creditors are still at odds over who will oversee the new privatization fund. This issue must be resolved for Athens to qualify for fresh bailout aid.

Government sources are optimistic that a deal will be reached by the start of next week on the staffing of the new Privatization Fund, estimating that the approval of the 2.8 billion euro tranche could come as soon as the September 29 Euro-Working Group (EWG).