By T. Tsiros
[email protected]
With a more-or-less successful first foray into the capital markets since 2014 this week behind it, the leftist-rightist coalition government in Athens now has a full agenda on its hands for September, with deadlines looming to implement dozens of “prior actions” demanded by creditors.
Specifically, 66 out of 113 “prior actions”, or “key deliverables” as a recent EU compliance report states, must be implemented in order for the third review of the Greek bailout program to conclude as scheduled in the autumn. The second review was delayed by roughly a year and a half and was only achieved last month, in mid June.
Memorandum-mandated actions that appear ready for implementation – after months if not years in the making – are an electronic platform for auctions of foreclosed property and an out-of-court settlement process for arrears to the state.
Figures released in September are also expected to confirm if the country’s economy has returned to a growth orbit, as the independent statistical service (EL.STAT) will release GDP figures for the second quarter of 2017. Additionally, the course of execution for the year’s budget will also become clearer.
Another closely watched development in September is the degree with which the Greek state reduces arrears to the private sector, especially after draining three billion euros from this week’s five-year issue of new notes, half of which were switched by investors that held debt from the previous five-year bond issued in 2014. Successfully reducing arrears will free-up an 800-million-euro remainder from a loan tranche disbursed by the ESM this month, the “reward” following the conclusion of the second review.
Among the most prominent and politically charged “prior actions” that the limping Tsipras coalition government must implement are institution of a new framework for workforce transfers in Greece’s vast public sector; new business plans for the central state-run Athens and Thessaloniki water companies (EYDAP and EYATh, respectively); the aforementioned e-auctions platform; the continued transfer of more state assets into a public holdings companies as well as the still-delayed privatization of national natgas provider DES.FA.
The Greek side must also implement all of the proposals contained in the so-called OECD “tool kit”, market and labor sector reforms and liberalizations that have for years been on the back-burner.
Another high-profile measure that Athens must implement is a new legislative framework for all state allocated bonuses and subsidies, with the direction of rationalizing state spending.
