The latest “realistic” goal cited by high-ranking Greek government official for concluding the now delayed second review of the Greek program (third bailout) is now given as early March 2017, before a crucial ECB board of directors meeting.
The date and venue is cited in order to achieve the re-inclusion of Greek bonds as collateral for the European Central Bank’s quantitative easing (QE) program.
The current, short-term strategy eyed by the increasingly embattled leftist government in Athens is to avoid any negotiations that lead to a new reduction in the tax-free ceiling for wage-earners (now at roughly 8,500 euros annually), beginning in 2019, or even the possibility of new pension cuts.
The challenges facing Athens in its negotiations with creditors in the short term are to cover a looming shortfall in the 2018 budget; a mutually accepted compromise on labor liberalization in Greece, and lastly, finalizing fiscal targets after 2019. The latter issue, moreover, is directly linked with the IMF’s continued participation in the Greek bailout program.
The only decision set for implementation in January affects short-term debt relief measures for the Greek load, agreed to last month.
Along those lines, a European official this week said the ESM has increased its funding needs by 14 percent for 2017 in order to cover the expected costs from the Greek debt relief measures.