Brussels, 05/12/2012 (Agence Europe) - On Tuesday 4 December, the ECOFIN Council officially confirmed that Greece has been given two more years to correct its budget deficit, as was agreed by its troika of lenders (the European Commission, the European Central Bank and the IMF) in the recent deal on sustainability of the Greek debt (see EUROPE 10739). Due to the deterioration in its economy, Greece will now have until 2016 (rather than 2014) to bring its public deficit back below the 3% of GDP reference point. Under the revised targets, Greece will now be expected to achieve a primary surplus of 0% of GDP in 2013, 1.5% in 2014, 3% in 2015 and 4.5% in 2016.
The agreement between Greece and the troika paves the way for disbursement of the next aid instalment (€34.4 billion in December) as agreed in the second Greek bailout, as long as the buy-back of Greek bonds from private investors this week goes to plan. In order to receive the aid instalments for 2013, the Greek government must introduce tax reforms in January. The Greek prime minister, Antonis Samaras, and Greek finance minister, Yannis Stournaras, have denied rumours in the Greek media on Tuesday that income tax was due to rise to 45% on annual income in excess of €25,000. (EL/transl.fl)