Leaders from European institutions have begun discussions in Athens over Greek compliance with bailout terms, in order to ascertain whether to release the next payment.
Discussions over the 86 billion euro bailout, which was finally agreed in July, created a media storm and played havoc with global markets. Under international pressure, Greek Prime Minister Alexis Tsipras accepted the terms of the agreement and is currently pursuing drastic budget cuts.
The International Monetary Fund must be satisfied with reforms that have already been passed, as well as plans for the future, before the next 3 billion euro payment will be sent. In total, Athens will have to implement a total of 48 ‘milestones’ to satisfy creditors and receive the total loan amount. Should this week’s discussions prove positive, another payment could be released as early as the beginning of next week.
The first phase of reforms, though sparking dissent from Greek people, were relatively simple compared to what may come next. Reforms under discussion include taxing farmers, raising tax for private education and merging pension funds, which is likely to mean further cutbacks; civil servants and private sector workers have called a nationwide strike on November 12th as a protest. However, Greek Labour Minister George Katrougalos backed the reforms, telling Antenna Television that:
“A basic element will be a national pension for all, funded through taxation. We estimate the burden for the national pension will be 7 percent of GDP, now it is 9.5 percent of GDP.”
Whilst Greece has largely been out of the public eye since the bailout was agreed, the country’s public sector finances have continued to go downhill as some capital controls remain in effect. State revenues were 18 percent below their target for September, with the government’s primary budget surplus falling to its lowest level since February.
