August a benchmark for course of budget, GDP target

This August may not have the “high drama” that the corresponding month in 2015 witnessed, which saw the government sign and ratify a third bailout memorandum, yet several goals lie ahead, including a “mini evaluation” in September to free up 2.8 billion euros remaining from a loan tranche.

In terms of privatizations, while several projects have recorded progress, a successful conclusion is considered the point when “money changes hands”.

This month will also reveal whether fiscal goals are on target, particularly a 0.5-percent primary budget surplus target for 2016.

The government, as well as European creditors, has predicted that the economy will recover in the second half of 2016 by enough to keep the yearly recession rate at a marginal 0.3 percent. The course of revenues is also eagerly expected, as failure to meet targets will activate the dreaded “cutter”, an automatic spending cuts mechanism passed in May.

Last, but not least, the leftist Tsipras government must promote 15 prior actions demanded by creditors in order to receive the 2.8 billion euros in bailout money.

The next Eurogroup meeting is set for Sept. 9.

One of the demands by creditors is for all small business owners to be insured in the self-employed professionals’ pension fund, OAEE, which would mean forking over a whopping 26.95 percent of their taxable income for primary pension and health care coverage. At present, small-scale self-employed professionals active in municipalities with a population of under 2,000 residents, and who declared an income of less than 10,000 euros, are insured in the farmers’ fund.

An additional demand is an abolition of discounts for contributions by various professional castes, such as physicians, lawyers, civil engineers etc. 

Key reforms aimed to liberalize the labor market will also take center-stage in September, in negotiations between Athens and its institutional creditors.