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Athens sends defiant message to creditors: “No more austerity measures”

By   /   25/01/2017  /   Comments Off on Athens sends defiant message to creditors: “No more austerity measures”

Greek Prime Minister Alexis Tsipras sounded a warning to the country’s creditors ahead of a Eurogroup meeting this week that his government will not legislate any more austerity measures. The PM also ruled out the prospect of an early election being called and yet again called the International Monetary Fund to “assume responsibility for its positions regarding the Greek program”.

Thursday’s Eurogroup meeting should not be expected to yield any immediate result on the ongoing talks about the Greek program.

“We will see how we can move to a swift conclusion… but this obviously cannot be achieved on Thursday,” economic and financial affairs commissioner Pierre Moscovici said on Tuesday.

Greek officials are optimistic that enough progress can be made Thursday to allow creditors to return to Athens next week to resume the review of Greece’s bailout program.

Dimitris Tzanakopoulos, the Greek government spokesman, told reporters on Tuesday that Athens has tabled a proposal for an extension of an automatic spending cuts mechanism – the so called fiscal cutter. However, the spokesman made clear that it will apply just for one additional year after 2018, when the current bailout program ends.

Crucially, the spokesman added that Athens has no intention of legislating extra measures now to be implemented beyond 2018. He also explained that the extension of the fiscal cutter will have to be enacted through a law passed by Parliament.

According to local reports, automatic spending cuts will almost certainly include reductions of civil service wages and pensions. Tax hikes could also be on the cards by way of slashing the tax-free threshold.

Meanwhile, speaking to the Hong Kong Economic Times, European Stability Mechanism (ESM) chief, Klaus Regling, referred to Greece as a “special case” amongst Eurozone member-states.

The European official added that the Greek bailout needs to be given more time. However, Regling said, results are already starting to show. “Our approach is working [in Greece]” he said.

Eurogroup chief Jeroen Dijsselbloem made similar comments on Tuesday. He cited progress in the Greek rescue plan, adding however, that many of Greece’s structural economic and institutional problems still need to be addressed. Dijsselbloem added that cooperation continues but not as fast as many – including the Greek government – would have liked.

Surplus

Greece posted a 4.437-billion euro primary budget surplus for 2016, exceeding a 2.270-billion-euro figure for 2015 and a set goal of 1.983 billion.

Net revenues reached 54.038 billion euros, up by 1.686 billion euros above the target, the country’s Finance Ministry announced./ΙΒΝΑ

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