The Eurogroup on Friday added a few “sticks” to the “carrots” provided to Athens with the release of 970 million euros, as part of a 2017 debt relief package, reiterating that there are no margins for let-ups in reforms and privatizations in the thrice bailed-out east Mediterranean country.
An announcement by the Eurozone’s finance ministers. after the favorable Friday session for Greek interests. noted that Athens again promised to continue implementing agreed reforms, including a pre-legislated reduction in the annual tax-free income threshold – a measure set to come on line on Jan. 1, 2020.
Eurozone finance ministers echoed the IMF’s standing position regarding a need to expand Greece’s still narrow base, where wage-earners and pensions with an annual income of more than 8,000 euros account for the “lion’s share” of annual income taxes collected.
At the same time, European partners again reminded the poll-trailing Tsipras government of another commitment to fully cover all state arrears to the private sector, along with promises over more effective tax and social security collection, careful public sector hirings, privatizations and continued liberalization of the labor market in the country.
Finally, the Eurogroup called on Athens to closely monitory developments in the wake of a recent unilateral hike in the minimum monthly wage scale, mandated by the leftist government for the private sector without a previous collective bargaining negotiation between social partners.
The decision raised eyebrows among European creditors and generated criticism by business groups in Greece, while the opposition ridiculed the pay raise, charging that if the tax-free annual income threshold is reduced, as planned next year. then most of the extra cash will wind up in the state’s coffers and not in low wage-earners’ pockets. Such a development would increase employers’ labor costs to the benefit to the state, the opposition warned.
Both the EU Commission and the IMF recently expressed concern over the unilateral 11-percent pay increase foisted by the government on the private sector.
Finally, the “stick” portion of the announcement revisited the apparently never-ending Greek legal quagmire involving three former EU experts (CoEX) sent to advise the Hellenic Republic Asset Development Fund (HRADF), the memorandum-mandated privatization agency in the country, and former Greek statistics authority chief Andreas Georgiou.
The Eurogroup said it was closely monitoring the continuing legal procedures in both cases, which have attracted sharp criticism and ridicule of Greece legal system by European and international leaders.
