By T. Tsiros
The Greek government faces yet another “hell week” on the economic front beginning on Monday, as an array of outstanding issues and the distinct possibility of negative news regarding Q3 GDP threaten to cast a shadow on next month’s negotiations for a second review of the Greek program (third bailout).
At present, only one out of 15 “prior actions” demanded by institutional creditors in order disburse a 2.8-billion-euro loan sub-tranche has been implemented.
Greece’s statistics bureau, EL.STAT, will announce revised figures for Q3 2016 GDP, which is expected to confirm that the Greek economy remains in recession for a fourth straight quarter. The agency, in fact, was the focus of yet another controversy last week, after legal action against EL.STAT’s former director between 2010 and 2015 resumed.
Andreas Georgiou has been charged by a prosecutor of essentially “booking the books” during his tenure, in order to show higher budget deficits. The allegations, contained in an indictment, cover the period during which successive Greek government signed off on memorandum containing creditors’ terms and conditions for bailout aid. A very high budget deficit for 2009, far exceeding even the most negative predictions, caused the beginning of the sovereign debt crisis in the country, which rapidly turned into the worst economic recession in the post WWII period for Greece.
The EU Commission reacted angrily to the news of the renewed prosecution against Georgiou and emphasized that the statistics on which it based its participation in three bailouts are correct. The leftist Greek government mostly reacted, via a handful of ministers, by charging that Brussels was interfering in a wholly judicial matter.
Monday will also witness a meeting between EU Commission Pierre Moscovici with the Greek finance and economy ministers, Euclid Tsakalotos and Giorgos Stathakis, respectively, on the occasion of a Euro Working Group meeting.
Last but not least, the Greek side wants to return to Athens with something substantive in terms of debt relief, given that the leftist Tsipras government has been on the "receiving end" of increasingly shrill criticism and flagging support – as shown by opinion polls – due to a “tax tsunami” and pension reforms passed last spring.
Prior actions that must be implemented by the leftist government and its small rightist-populist coalition partner include:
- A hike in social security contributions by SME owners and self-employed professionals
- Transferring a second batch of state-owned enterprises into a privatization fund
- Opening an international tender for the long-term concession of the Egnatia motorway that stretches across the breadth of northern Greece, along with its vertical road axes
- Transferring the remaining shares owned by the state in the one-time telephony monopoly, OTE, to the privatization fund
- Harmonizing Greek law with the Community framework on the electrical power sector
- Modifying national legislation regarding the controversial Special Duty of Greenhouse Gas Emissions Reduction ΕΤΜΕΑR
- Completing negotiations over the power rates for high voltage users
- Guaranteeing funding and manpower for a new and semi-autonomous public revenues directorate.
