By T. Tsiros
The latest deadline to conclude the now delayed second review of the Greek program (third review) has a new year behind the date — Jan. 26, 2017 — when the Eurogroup will next convene, following a “Yuletide” compromise to overcome creditors’ apprehension with an abrupt holiday bonus for pensioners, announced by the Greek prime minister in early December.
Still pending is the question of fiscal targets after 2018, with the Greek side reportedly again relying on the provision of an automatic spending cuts mechanism to allay creditors’ demands for high primary budget surplus targets.
The end-of-year developments were punctuated by written assurances provided by Greek Finance Minister Euclid Tsakalotos to creditors — as per a demand by the Eurogroup and ESM — namely, that Athens remains committed to social security reforms and the “cutter” spending measure to meet fiscal targets.
What the media and opposition now want to see is the actual letter sent by Tsakalotos, with only Eurogroup chairman Jeroen Dijsselbloem and government “sources” in wintry Athens referring to its contents and the leftist Greek side’s renewed commitments.
According to the ubiquitous government sources on Christmas Day, the 617-million-euro “holiday bonus” announced by Alexis Tsipras earlier this month is a “one-off measure”.
Another highlight, as far as the statements by the sources is concerned, is a reference to a “contingency fiscal mechanism” in case primary budget surpluses are not met. The mechanism is the automatic spending cuts process, or “cutter”, that kicks in if fiscal targets aren’t met. The same sources repeated the government’s intent to meet those targets: 0.5 percent primary budget surplus (as a percentage of GDP) in 2016; 1.75 percent in 2017 and the ambitious 3.5 percent in 2018.
