With first review almost in the bag, gov’t eyes next reforms

4 June 2016
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With just a few prior actions to legislate before the country’s creditors can give the green light for much-needed rescue loans, the government is now turning its attention to a new set of measures it must implement for the second bailout review in the fall.

Greece’s creditors are expected to approve the release of 7.5 billion euros in rescue loans in time for Athens to make debt repayments in July.

But the summer will be far from carefree for Prime Minister Alexis Tsipras and Finance Minister Euclid Tsakalotos.

In comments at the end of last week, when his French counterpart Michel Sapin was in town, Tsakalotos conceded that Athens still faced many “difficulties” ahead such as changes to labor rights legislation that it must push through.

France has faced violent demonstrations as it tries to implement similar laws, making it easier for firms to hire and fire employees.

In an interview with the left-leaning Efimerida ton Syntakton newspaper, Tsipras said his government would protect jobs as it had protected primary homes from foreclosures and main pensions from excessive cuts.

He added that the completion of the bailout review signaled that Greece had “turned a page” and that economic recovery was in sight.

Apart from laws on collective labor contracts and union rights, Greece faces a series of measures to enforce for the second bailout review, in all a total of 20 “key deliverables.”

The list includes appointing a board for the new independent public revenue agency, the drafting of a plan to crack down on undeclared labor, and the announcement of a tender for a 20 percent stake in power grid operator ADMIE.

Privatizations are a key area of interest for creditors as the revenue the sell-offs generate will partially go toward repaying Greece’s debt.

The sell-offs are also crucial for the government as the new privatization fund, unlike the outgoing TAIPED, will allocate 50 percent of the revenue it draws to debt repayments and other 50 percent toward boosting growth.

The second bailout review is expected in October. By November the International Monetary Fund is to release a new debt sustainability analysis for Greece.

That report will launch the debate for debt relief for Greece which is expected to start from 2018, as agreed by creditors at a summit of eurozone finance ministers last month.

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