IMF’s demands for new Greek bailout deal

A new pension cut, layoffs and a further reduction of its tax-free threshold are some of the new measures demanded by the IMF in exchange for joining Greece’s new bailout program, in addition to an active rather than an advisory role.

According to an article in “Vima tis Kyriakis,” IMF mission chief Delia Velkulescu stressed the need for the implementation of certain reforms in order for the Fund to even consider “throwing money” Greece’s way:

• The abolishment of “personal dispute” with respect to existing primary pensions
• The further reduction of the tax-free threshold, currently at 8,600 Euros, and the elimination of all tax exemptions
• The increase in collective redundancies up to 10% of the workforce

According to sources, an agreement has already been struck between the IMF and Berlin, with Mr. Wolfgang Schäuble allegedly willing to be flexible on the issue of debt restructuring if Athens agrees to take the above measures. In order to get Athens to go along with the reforms, the creditors – and the IMF and Germany in particular – appear willing to offer incentives, if it can be assumed the Greek government is putting up resistance.  These include:

a) The Eurogroup’s agreement, in principle, of December 5 for the second  review as well as its finalization by January

b) IMF’s entrance into the Greek bailout program with the provision of 6 billion Euros

c) The sustainability report for the debt, which will be drawn up  by the IMF (DSA), will take into account proposals by the European Stability Mechanism (ESM) with regard to short-term measures for it, and a clearer formulation of what will happen after 2018, and

d) The integration of Greek bonds into the ECB’s quantitative easing program.

Source: newmoney.gr