The government’s financial staff appears optimistic about reaching a final agreement with Greece’s international creditors by the 18th of August, so that the new loan agreement may be signed by the 20th of August. Well-informed sources have told To Vima that there are good intentions from both sides in what seems to be the best period in the relationship between the Greek side and the institutions, in contrast to when Yanis Varoufakis was Finance Minister. His successor Euclid Tsakalotos is considered more cooperative and focused on reaching a deal.
According to a government source, there are no apparent problems to block an agreement, however there were some objections raised by the institutions in Monday’s meeting with Labor Minister Giorgos Katrougalos, who spoke of “reversing the deregulation of the past five ‘memorandum’ years” and other matters related to pension cuts. The same source though is quick to note that these will not jeopardize the essence of the negotiation.
Talks seem to be focused on the prior actions and other maters that need to close now, while others will be postponed for October, so that the necessary planning may take place. The Greek side is not under major pressure, however the goal is to conclude talks by the 18th of August. Other issues being debated are the new loan agreement, the ‘Juncker’ growth plan, the recapitalization of the banks and the agreement for a debt restructure, which Greece has prioritized. The repayment period of the new loan and the terms to follow will be paramount in the debt restructure agreement. In the case of the bank refinancing, the Bank of Greece will plan a major, as it will determine the true needs of the systemic banks via special procedures and readings.
Agenda for Tuesday
Two significant issues will be on the agenda on Tuesday, the 4th of August: privatizations and non-performing loans (“red loans”). Finance Minister Tsakalotos will be accompanied by Economy Minister Giorgos Stathakis in the meetings with the delegates of the institutions at the Athens Hilton on Tuesday and Wednesday. The “red loans” are directly associated to the recapitalization of the banks and it has been estimated that measures must be taken immediately to restrict them. After the introduction of capital controls, it has been estimated that the value of non-performing loans has risen to 100 billion euros.
ENFIA and farmer taxation reforms
The controversial “ENFIA” real estate tax and the taxation of farmers have also been on the agenda in the recent meetings with the technical teams of the institutions. The government aims to collect 2.65 billion euros via the ENFIA is examining options in order to lessen the burden on small and medium-valued property, while increasing the tax for high value property (with a taxable value over 300,000 euros). The first invoices will be sent out by mid August, with tax payers expected to pay the full amount in installments by January or February 2016. The demands to increase the taxation of farmers and abolish benefits and subsidies are problematic for the government and it is seeking for equivalent alternative measures to limit the burden.
