EU Document Confirms Greece’s Post-Bailout Scrutiny

As eurozone finance ministers gather in Brussels on Thursday to finalize Greece’s exit from the current bailout package, a document published by the European Commission confirms the country will remain under the creditors’ microscope after August 2018.

The 40-page Supplemental Memorandum of Understanding describes Greece’s obligations in areas such as fiscal policy, taxation, tax evasion and the management of public finances, after the end of the program.

Reports from Brussels say although all creditors agree the time has come to formally end the bailout program, they are less eager to give Greece the relative freedom they have afforded other countries which went through a similar process.

The document confirms that extensive pension cuts will be implemented in January 2019, followed by the phasing out the solidarity grant (EKAS) for all pensioners by end-December 2019.

“The authorities, as a prior action, will bring forward the implementation of the personal income tax measures to 2019 if the IMF, in cooperation with the European institutions and the Greek authorities … considers that… a frontloaded implementation is needed in order to reach the agreed 3.5-percent primary surplus fiscal target in 2019,” the document reads.

It also says that “the primary surplus target of 3.5 percent of GDP will be maintained over the medium term until 2022”.

In this context, they call on Greece to “continue to design and implement a wide range of structural reforms that not only ensure full compliance with EU requirements”.

“The success of recovery will require the sustained implementation of agreed policies over many years,” the document adds.

The Greek government “commits to consult and agree with the European Commission, the European Central Bank and the International Monetary Fund on all actions relevant for the achievement of the objectives of the Memorandum of Understanding before these are finalized and legally adopted”.

Read the Supplemental Memorandum of Understanding here