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Five billion euro are required for the Greek programme

19 February 2014 / 19:02:50  GRReporter
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5. Cancelling taxes in favour of third parties. The memorandum states (after an agreement between the government and the Troika) that the taxes and fees to third parties should be cancelled; the taxes and fees whose revenues should be preserved will be transferred to the state budget. The Ministry of Finance has already compiled a list of the taxes in favour of third parties and submitted it to the Troika.

6. Completing the reforms contained in the agenda of the Organization for Economic Cooperation and Development.

Maturity of bonds

1. 12 May is the deadline for the payment of the instalment to the IMF on the first loan, amounting to 792 million euro or to about 820 million euro including interest.

2. 20 May 2014 is the maturity date of the bonds of the European Central Bank to the amount of 2.87 billion euro and of the bonds of the central banks in the Euro area worth 1.25 billion euro. This is also the maturity date of a bond of the European Union to the amount of 7 million euro and of a loan from the European Investment Bank to the amount of 30 million euro.

3. Also, 21 May is the maturity date of bonds worth 4.47 billion euro, issued in 2008 to increase the liquidity of the Greek economy against the acquisition of preferred shares of Greek banks by the Greek state.

4. Furthermore, 21 May is the maturity date of two bonds of the European Central Bank totalling 41 million euro.

5. 20 August 2014 is the maturity date of bonds to the amount of 3.96 billion euro, owned by the European Central Bank (3.57 billion euro) and of the central banks of the euro area (393 million euro), and of an instalment worth 370 million euro to the IMF on the first loan.

Social benefits will be the subject of confrontation

Different types of social payments that the government will make due to the upcoming elections, distributing the primary budget surplus for 2013, will be the subject of confrontation with the Troika.

It has been already decided to stop the increase in taxes on the allowance for dangerous work paid to certain categories of the military. Based on the law voted in the summer, as of January 2014 this allowance should have been added to the income of uniformed workers and taxed in full, which had led to an increase in taxes. By the end of 2013, 65% of this allowance was not subject to taxation and the remaining 35% were added to the annual income of the military and subject to the relevant tax.

Furthermore, the decision of the State Council, which is the Supreme Administrative Court of the country, on the repeal of the reduction of the salaries of uniformed workers, university teachers and on the possible reduction of the remuneration on all special payroll scales that the government intends to apply to "correct the injustice" is to be officially published.

The total cost of these decisions can amount to 1 billion euro and they will cause "permanent damage" to the budget, accounting for the fact that, if legalized, the pay adjustment will be permanent.

In addition, the lenders are concerned due to some pieces of information about the payment of special Easter allowances to pensioners and civil servants (!), which will increase the government spending, thus weakening the fiscal discipline.

It should be recalled that, according to the memorandum, the surplus funds should be allocated to the most socially vulnerable groups of the population, which probably include those 1.4 million unemployed who do not receive even unemployment benefits as well as those households whose income is below the poverty line.


Tags: TalksTroikaEuropean Central BankInternational Monetary Fund
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