Strict supervision; pension cuts, lower tax-free income ceiling cited in Commission’s supplemental MoU for Greece

24 May 2018
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The European Commission’s 40-page ” Supplemental Memorandum of Understanding” for Greece was posted on Thursday morning, highlighting what it called the “implementation of agreed policies for several years”, and in relation to what it terms technical assistance that will continue to be extended to the crisis-battered country.

The document was dated May 23, 2018.

Other highlights include:

a commitment, by Greek governments, to annual primary budget surpluses of 3.5 percent (as a percentage of GDP) until 2022

continuing implementation of agreed to reforms over the long term

maintaining a clause that implements a reduction in the annual tax-free income ceiling as of Jan. 1, 2019, rather than a year later, something demanded by the IMF

In terms of another political “hot potato” the poll-trailing Tsipras coalition government is now trying to handle, i.e. another round of pension cuts, the document notes:

“… pension reform to be implemented in 2019, delivering net savings of 1% of GDP in 2019

– 2022 and a personal income tax reform to be implemented in 2020 and delivering net savings of 1% of GDP in 2020, 2021 and 2022 …”

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