Brussels, 30/03/2015 (Agence Europe) - The European Commission has described the discussions being held between the Greek authorities and the “Brussels group” (Commission, ECB, IMF and EFSF) on the list of reforms submitted by Athens on Friday as constructive (see EUROPE 11284).
“We are not there yet. That is why the discussions need a fact-finding mission in Athens”, said Commission spokesperson Margaritis Schinas, on Monday 30 March. He declined to comment on the substance of the talks but said that the very fact that they were being carried out at all shows the “willingness and seriousness of all parties to engage with each other”. He said that a telephone conference of the body responsible for preparing for the Eurogroup at the Council (“euro working group”) could take place before Easter (probably this Wednesday). The Greek dossier will also be on the agenda of the regular meeting of this expert group on 8 April.
Last week, there was talk of a possible Eurogroup meeting this week to break Greece's financial suffocation, as some commentators believe that the country will run short of money on 8 April (with repayment of more than €450 million to the IMF scheduled for 9 April). On Monday, several Eurozone sources said that there would be no Eurogroup meeting before Easter. The financial urgency therefore appears to have been appeased. According to the French daily newspaper Le Monde, this can be put down to the existence of reserves in various Greek administrations.
The problem is that Greece is reported not really to have submitted a list of reforms, but rather a list of ideas. These measures must be “verified and calculated on the basis of their costs and revenue, and this will take time”, one Eurozone source told us, adding that some of the measures presented seem to go “very much in the wrong direction”. Examples are allowing wealthy taxpayers to be granted a payment plan to pay back their tax debt without penalties and with overly lenient deadlines, or including the anti-corruption authority within a parent ministry rather than making it a stand-alone authority. The source went on to state the view that various other measures had not been sufficiently discussed with the institutions which, moreover, “goes against the Eurogroup agreement of February”. Other measures seem to be based on excessively optimistic forecasts, or are quite simply without foundation. Progress is reported to have been limited and the parties are still believed to be a long way from what they need in order to wrap up the monitoring mission.
The Greek plan provides for some 20 measures designed to boost revenue by €3 billion this year. The Greek document anticipates a primary budgetary surplus (not including debt servicing) of 1.5% of GDP and growth of 1.4% of GDP. Amongst other things, it contains a possible, but unconfirmed, increase in VAT and was apparently insufficiently exhaustive on the pension age or the implementation of reforms on the employment market. Greece is also reported to have undertaken to make progress in privatisations (it hopes to raise €500 million through the privatisation of the port of Piraeus), but to have adjusted the revenue it hopes to raise in this area downwards. It is also reported to have committed to keep the property tax in place.
Fighting tax evasion is one of Greece's major priorities. It is worth noting that in this area, a report by the Dutch research Institute SOMO published on Monday shows how the company Eldorado Gold uses mailbox addresses in the Netherlands to avoid having to pay tax in Greece, costing the Greek Treasury €1.7 billion. SOMO also stresses that, following the financial crisis, the tax burden has been increasingly transferred from businesses to employees, many of whom “now live in conditions of extreme deprivation, or worse”. (Elodie Lamer)