All eyes on EWG meeting on Thurs; EZ source: Mood affected by Athens' 'holiday bonus'

Thursday, 12 January 2017 10:33
SOOC/Nick Paleologos

By N. Bellos

Despite a Christmas Eve promise by the Greek FinMin that last month's abrupt "holiday bonus" to 1.6 million pensioners in Greece will not be repeated without prior consultation with creditors, sources in Brussels on Thursday said the mood at a same-day EWG meeting has been negatively affected by the one-off spending spree by the leftist government.

"After what transpired in (early) December, it is certain that the second review (of the Greek program) will not be a simple bureaucratic procedure, rather political capital will have to be expended," a Eurozone source told "N" on Wednesday.

According to numerous press reports out of the Greek capital this week, the embattled Tsipras government appears ready to appease, to a certain degree, creditors' demands for guaranteed fiscal targets after 2019, namely, by lowering the tax-free ceiling for wage-earners and self-employed professionals (currently at roughly 8,500 euros) and further pension cuts.

The latter measures are standing demands by the IMF over the recent period, as the Fund has repeatedly said fiscal targets demanded by European creditors are unrealistic, therefore, additional measures are needed to meet such goals -- i.e. a 3.5-percent primary budget surplus as a percentage of GDP after 2019, and for a number of years.

All eyes are on Thursday's EWG meeting in Brussels, which comes on the same day as a scheduled meeting between Eurogroup chairman and Dutch FinMin Jeroen Dijsselbloem with his Greek counterpart, Euclid Tsakalotos.

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