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Greece has largely agreed with creditors, extra Eurogroup in May to conclude second review

Media quoting Greek government sources report Thursday afternoon that there will be an extraordinary Eurogroup meeting in the fist ten days of May in order to conclude the second review of the current Greek program. “This is the creditor’s commitment,” the sources said adding that the staff-level agreement will be achieve at the Eurogroup meeting on April 7.

The Greek side is confident although the sign coming from the famous ‘EU sources anonymous” are not. They put higher demands on the labor reforms ( mass lay-off at 10%) that Greek government will have difficulties to accept.

Finance and Labor ministers Euclid Tsakalotos and Efi Achtsioglou on Thursday presented the framework of a deal the Greek government plans to present to the April 7 Eurogroup meeting in the hope of securing an agreement on the ongoing bailout review.

The two ministers outlined the contours of the government’s plan to the parliamentary group of junior coalition partner Independent Greeks in a bid to drum up support for measures being demanded by the country’s creditors.

They appeared confident of a technical agreement being achieved next week so that the plan can be presented for approval to the Eurogroup meeting on April 7.

According to sources, the Greek government has accepted

  • the demand for lowering the tax-free threshold to 5,900-6,000 euros
  • maintaining the 3.5 % primary surplus level for three years after 2018.
  • pensions: the personal difference will first be levied against those insured with the freelancers’ OAEE fund and retired civil servants, and then against pensioners insured by private sector fund IKA.
  • The ministers said they were not at liberty to discuss the thorny issue of labor reform as the negotiations are still ongoing.

With regards to the counter-measures the government hopes to agree with lenders on

  • Revenues from Property tax (ENFIA) reduction at 200million-400million euros
  • Tax rates: decrease of 2 points for natural persons and businesses
  • 120,000 children to get free access to kindergartens without income criteria of parents

The counter-measures are measures to benefit the society when 3.5% primary surpluses are achieved.

There is a Euro working Group meeting today Thursday.

Meanwhile in the Netherlands, Eurogroup chairman Jeroen Dijsselbloem warned that a staff-level agreement between the Greek side and institutional creditors has still not been achieved, slightly dampening widespread speculation this week that both sides have clinched the deal.

Speaking at the Dutch parliament, Dijsselbloem nevertheless said negotiations have recorded progress over recent days. He added that the next loan tranche extended to the bailout-dependent country could reach seven billion euros, clarifying this depends on the outcome of negotiations to conclude the second review of the Greek program.

PS No, he did not say when he plans to step down as Eurogroup head.

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One comment

  1. As everybody knows the 3.5% primary surplus is impossible to achieve. This means that the only result out of this masquerade will be more looting of citizens and more recessio;, all according to the demolition plan.