The talks between the Greek government and the institutions continued over the weekend, in an effort to reach an agreement by the Eurogroup scheduled for 5 December. The Greek side has been presented with draft agreements by the institutions on labor, social insurance and further tax reforms.
According to these drafts, aside from the 6.1 billion euros in aid, Greece will be facilitated in paying off 20% of the public debt. This is the so-called ‘first phase’ by the ESM, in order to address 65 of the 324 billion euros worth of debt. Overall, banking sources indicate that the actions towards facilitating payment of the loans may save 15 to 17 billion euros.
The primary surplus targets after 2018 will be the next major issue to tackle, with the government aiming for a annual target under 3.5% of the GDP. The IMF also supports such a development, with the Eurogroup chief Jeroen Dijsselbloem seemingly open to setting a ‘realistic’ target.
The Governor of the Bank of Greece Yannis Stournaras has argued that the target was must lowered to 2% in order to provide the necessary breathing space for the economy, which in the mid-term will allow for a reduction of the tax burden.
