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PM Tsipras announces Gov’t goals, budget draft sees austerity worth €6.4 bln

The “Silly Season” is over. Time for hard work, hard news and figures. Greece’s government is challenged to meet its obligations towards the country’s lenders, successfully pass the first review and receive 2 billion euro as first tranche of 3. bailout program.

After the Eurogroup approved the 48 Prior Actions on Monday, lenders are awaiting for the Parliament to proceed with the voting within the next two weeks.

Monday was indeed an important day for Greece in terms of politics and finances. Prime Minister Alexis Tsipras announced its government policy priorities with the key goals being

to restore economic stability, secure return to growth, achieve debt relief, radically reform the public sector, reform of the taxation and primary health care system, scrap early retirement, protect the vulnerable groups of the society, crack down on tax evasion, combat corruption and intermingling of politics and business world.

Tsipras stressed that main goal of the government is to restore the liquidity and have Greece “return to the markets in the first half of 2017”.

I listened to the long speech and it sounded fine. In fact, it sounded really “too good to be true” because we have heard such government priorities before, they have all failed so far. Why? I cannot tell you really, but I assume that it was always the powerful local lobbies that pushed to “reforms” that were serving their own interests, while the not-organized social groups were left to pay the price.

Therefore, my question is: How many of his key goals will Tsipras manage to achieve? The Greek PM claims that he has four years ahead to reach the government’s goals.

“By the end of the four-year term we will have set the foundations for a new Greece,” Tsipras said and I started counted how old I will be by 20. September 2019 and how will I benefit from the “new Greece.” Before I jump into a deep depression hose, Ι decided to calm down and give it a try. Not to think “long-term” but rather “short-term”. But then I read the Budget Draft for 2016 and there, the things do not look bright.

Short before Tsipras’ speech at the Parliament, Finance Ministry officials submitted to the Parliament the Draft Budget 2016. Projections seem not to promise a bright future.

Recession: economy is officially expected to shrink by 2.3% in 2015 and 1.3% in 2016.

Public debt is seen rising to 196% of Gross Domestic Product in 2015 and peak at 201 percent in 2016, including the new loans.

Primary deficit 0.25% in 2015 but primary surplus of 0.5% in 2016.

Unemployment increase: unemployment is expected to close at 25.4% in 2015 and 25.8% in 2016.

To make the long painful budget story short, in real life the government plans to raise 4 billion euro in taxes and 2.4 billion euro from expenditure cuts also in pensions) in the time period form October 2015 until December 2016.

But I shouldn’t worry about the 4 billion euro in taxes. And why should I? I have nothing to give. And anyway, by 2019 the government will have restored “social justice and dignity for the Greek people,” and have worked “for a society of equality and prosperity” as PM Tsipras said yesterday adding that “the bailout terms were a necessary condition.” No, I don’t worry. As of 2018 the Primary Surplus is projected to be 3.5% of the GDP. By 2018, everyone will have been happy and thus already as of 2017.

PS in summary: we have to be patients until the first half of 2017. And then things will get superb 🙂

48 Prior Actions Part I & Part II

budget sources: Reuters, ekathimerini, and others.

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  1. I envy your sense of humor.

  2. I have to force myself to watch Greece’s new Quisling rubber-stamp parliament these days. A parliament offering no hope to the Greek people. I guess the excitement will be which Oligarchs get which slice of national assets for almost free. They are rubbing their hands & drooling.

  3. Superbly said!