By G. Kouros
The expected ratification of an omnibus draft bill on Monday that includes a bevy of “prior actions” demanded by creditors as part of the third memorandum will, by all accounts, finalize efforts to conclude the third review of the ongoing bailout, with all eyes afterwards set on the fourth and last review.
Negotiations for the fourth review will commence after the third review is “rubberstamped” at the Jan. 22 Eurogroup meeting. The last review, however, is expected to be a landmark for the recession-battered country’s future economic course and fiscal policy.
One of the most closely watched points of negotiations in the coming review process is whether additional austerity measures will be needed and taken in 2019 – a prospect that the Tsipras government has already agreed to in the third memorandum and subsequent “revisions”.
Other pending issues involve changing objective tax criteria for real estate – co-efficients used by the Greek state to collect property taxes – as well as the future of a current protection regime for primary residences against creditors’ demands, which ends this year.
The IMF’s stance is considered as decisive in the upcoming phase, given that if the Fund considers that a primary budget surplus goal – as a percentage of GDP – of 3.5 percent is not achievable in 2019 through a foreseen reduction in pension rates, then a lowering of the tax-free annual income threshold will be moved up to 2019, instead of its planned application in 2020.
Another closely watched issue will be a revision, downwards, of disability benefits as well as the always timely course of memorandum-mandated privatizations.
All in all, 82 “prior actions” must be implemented, as part of the fourth review of the third bailout.
