Brussels, 02/04/2015 (Agence Europe) - French Finance Minister Michel Sapin said on Thursday 2 April that the updated reform list that Greece had sent to the eurozone the previous day marked progress but more needed to be done.
Progress has been made, it's better than before, said Sapin in Paris on 2 April, the day after a teleconference on Greece by national finance experts on the Euro Working Group. Sapin said that the answer to the question of whether more progress was needed was yes. The possibility of a special Eurogroup meeting ahead of the one in Riga on 24 April seems to be receding, as long as Greece is able to finance daily business and honour its debts to its lenders.
The latest reform list, published by the Financial Times, foresees savings of between €4.7 billion and €6.1 billion in 2015. Greece is counting on a primary budget surplus (not including debt servicing) of between 3.1% and 3.9% of GDP, higher than the initial target of 3% in 2015 and the 1.5% target it wanted to negotiate with the “institutions” (European Commission, ECB and IMF) in order to avoid stamping out the green shoots of recovery. It hopes to net between €725 million and €875 million this year from intensified audits of tax fraud. The fight against contraband tobacco, alcohol and fuel is expected to net between €350 million and €400 million. Tackling VAT fraud will bring in €350 - €420 million. A tax on online gambling would generate between €125 million and €175 million, and a tax on luxury goods €20 million. The government is planning a lottery system that would be cheaper for customers who request a receipt, and this is expected to bring in between €270 million and €600 million that would otherwise be lost in unpaid VAT.
Greece is pulling out the stops in terms of privatisation, stating that all the current sell-offs will be completed on time and others would be decided on a case-by-case basis, but it makes no mention of the measures desired by its lenders to liberalise the labour market or reform pensions. When it comes to pensions, the far-Left government is planning to reintroduce the thirteenth month for small pensions (at a cost of an estimated €600 million) and suspend the “zero deficit” clause that would have introduced greater cuts in civil service pensions (at a cost of €326 million). The list of reforms says that the gradual rise in the minimum wage that will begin in the fourth quarter of 2015 will have negligible fiscal impact in 2015 or 2016. Tackling the humanitarian crisis through food stamps, free electricity and housing aid for the poor will be compensated for by other measures, says the government.
The Euro Working Group teleconference on Wednesday took note of changes in the situation. The Wall Street Journal says the new Greek reform list is still a long way from being the basis of an agreement. Developments are not expected over the next few days, but Greece hopes agreement will be reached next week. If agreement is reached on the substance of the reforms, it will be actual implementation of the reforms that will allow the gradual release of the final batches of aid. (Elodie Lamer)