Greece
In latest showdown, IMF demands more cuts and reforms from Athens
Prime Minister Alexis Tsipras wants to stabilize the economy, but the precondition is that lenders conclude the second assessment.
This is the last round between the government of Alexis Tsipras and the International Monetary Fund. IMF’s European director Poul Thomsen, through an article published online, set up the most ambiguous position. He said that, on the one hand, the institution wants to help Greece return to the path of sustainable development. On the other hand, however, in this eternal game of the parties, the IMF thinks that the country needs “tax and pension reforms.” Put simply, more cuts.
According to Thomsen, therefore, “in Greece there are excessive tax breaks, which allow almost half of the employees not to pay taxes.” The answer of the Greek minister of finance, Efklìdis Tsakalòtos, was very quick. The economist and a close associate of Tsipras wanted to emphasize that “the total expenditure of the Athens government for pensions and all other forms of support does not exceed 70 percent of the E.U. average and corresponds to 52 percent of Germany’s.”
Tsakalòtos responds by presenting the figures, and points out that “45 percent of pensioners have an income below the poverty line of €665” and “nearly 4 million people — more than a third of the total population — are in danger of slipping under the threshold of social exclusion and poverty.”
The head of the Greek Ministry of Finance wonders: “Then, is it possible to believe that the main problem is the amount of Greek pensions and the no-tax area, which would be too generous?” Thus, the game of the parties continues. On the one hand, the IMF says it is not necessary to have a primary surplus of 3.5 percent, because this would, in fact, hinder growth. On the other hand, it insists on the need for new cuts in public spending, which is already reduced to a minimum.
One has to wonder if the various players of the international economic institutions have ever been in Greece, among all those citizens who cannot afford to pay the income and local taxes. The tax increase imposed so far has exhausted the country, and the Syriza government puts among its main priorities the reduction of the tax burden. Tsipras aims at stabilizing the economic situation, to bring Greece as soon as possible into Draghi’s Quantitative easing, to be able to confirm the growth forecasts of the GDP to 2.7 percent for next year. But for all that to happen, lenders have to conclude the second evaluation of the application of what has been agreed with Greece, as soon as possible.
Athens says: “After 2018 there must be no new measures and cuts.” But there are those who seem not to want to understand. And there are rumors of early elections, although the government denies them without hesitation.
Originally published at http://ilmanifesto.info/tagli-e-riforme-e-nuovo-scontro-tra-atene-e-fmi/ on 2016-12-14