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IMF’s Thomsen: measures €8,1bn, no gov’t spending cuts but more taxes for low-incomes

After all this whining by the managing director of the International Monetary Fund Christine Lagarde, the European official for the Greek program Poul Thomsen finally revealed what Lagarde meant with:

“3.5% Primary Surplus might be achievable in short-term with heroic efforts by Greek people”

Heroic efforts mean austerity measures worth 8,1 billion euro for the next three years!

During a press conference today, Thomsen did not say that explicitly. Repeating the IMF’s position that the 3.5% was not achievable at the end he said:

“We can accept it, but we have to look into measures. Greece has to take measures 4.5% of GDP” which 8.1 billion euro in total for 2016, 2017 and 2018., measures consisting of the European lenders and the IMF’s “condition” to join the program for 2016, 2017 and 2018.

If I am not wrong, the IMF was saying also in 2014 that Greece needed measures of some 7 billion euro. Is now the 3.5% just a pretext with which the IMF has been playing around all these last months pretending it cannot accept it and implying it might not join the Greek Program?

Where will these 8.1 billion euro will come form in 3 years? Thomsen said that theMF did not want Athens to further reduce discretionary government spending which was already among the lowest in Europe.

“As a result hospitals are complaining they don’t have syringes and busses are not driving because they don’t have spare parts,” Thomsen said adding  “So we don’t think it is credible to have a programme that assumes a further reduction in that kind of spending.”

If no further cuts in government spending how from where will these “measures” come? By taxing the low-incomes!

Poul Thomsen and the IMF want to lower the tax-free threshold which is currently 9.500 euro, down to 8.100 annual income.

Thomsen said the discussion about what Greece needed to change now focused on its “exceptionally generous” exemptions in its personal income tax, that effectively exempted 55 percent of households, while the euro zone average was 18 percent.

Greece also had a relatively high income threshold from which tax had to be paid – 9,500 euros per year – more than in richer countries like Germany. He said that further tax rises would not work, but that Greece needed to broaden its tax base.

If I understand Thomsen right, 55% of the Greek employees and pensioners have an annual income of 9.500 euro per year?

Of course, not. Or yes?

thomsen to pontiki

Poul Thomsen as Schissorhands in GR’s weekly To Pointiki. Yes, schissoring the low incomes.

PS probably the IMF found out that despite the sharp cuts of the last years in hospitals and the health sector, Greeks refuse to die. So he decides to have them starve.

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  1. It was certain that heroic efforts would not be made by Lagarde or her cronies.

  2. Giaourti Giaourtaki

    Just like the lie about German pensions being lower than Greek the threshold in Germany is 17.500, the idiot is referring to some ugly mini-jobs; last time he took the pensions incl X-mas-bonus and let it look like paid every month.
    Also this 3.5 bullshit is not part of the July-deal