Debt measures set for January at Euro Working Group

23 December 2016
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The issue of short-term measures for easing the Greek debt, which were frozen in response to the government’s unilateral decision to pay pensioners a Christmas bonus, has been put off until the Euro Working Group meeting on January 12.

According to Finance Ministry officials, minister Euclid Tsakalotos yesterday received “the points where answers are due” regarding the payment to pensioners and the suspension of the value-added tax increase for the eastern Aegean islands.

However, another ministry official spoke yesterday of a constant exchange of data between Athens and its creditors regarding the latest hurdle, although he made it clear that Tsakalotos has not yet provided the requested response.

The same official said this is a joint process toward the formation of a text with the creditors, including correspondence and informal consultations. He added that the procedure requires several days and is expected to be completed in early January.

Kathimerini understands that the Euro Working Group’s meeting on Tuesday issued guidelines to the government and the creditors to come up with the necessary clarifications, and has been informed that the issue will be discussed in its next scheduled meeting on January 12.

The creditors have requested confirmation from Athens that the pensioners’ handout is a one-off measure and the VAT measure is only for 2017. The lenders have also asked the government to pledge that in case the fiscal targets are not met, there will be a cut in expenditure in the very sector the handout was made – the pensioners. Athens must also promise that the fiscal targets will be met and that when the primary surplus is higher than that aimed for in future the agreement between the government and its creditors will be adhered to.

If the ministry and the creditors can agree on a text, then the Euro Working Group will have no reason to continue its freeze on short-term debt-easing measures. Their implementation has already been delayed as its application was approved in the December 5 Eurogroup.

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