Greek government preparing two “mini bailouts” to conclude review

Following Friday’s Eurogroup session, the Greek government will have to pass two “mini bailouts” with measures to the tune of 9 billion euros, in order to conclude the bailout review and enter talks on the debt.

The first bailout will include measures worth 5.4 billion euros, which were agreed upon on Friday. The second packaged of contingency measures will be worth 3.6 billion euros. Should an agreement be reached on the contingency measures, talks on reprofiling the Greek debt could begin as early as Thursday, at an emergency Eurogroup.

The Greek government will draw the 5.4 billion euros from the taxation and pension reforms, which includes raising the VAT from 23% to 24%, slashing supplementary pensions, raising insurance contributions of farmers and abolishing EKAS among others.

As for the second set of contingency measures, they are only to come into effect if the government fails to reach its target for a 3.5% of GDP primary surplus in 2018. This set of measures will likely involve pension cuts and reducing the VAT on certain products and services that currently have the lower 13% and 6%, such as electricity, water, medicine and books.