The resounding message from the IMF on reforms and debt

Dimitra Kadda

The International Monetary Fund opened its papers yesterday, transmitting the message of the "antenna" prosecution and the implementation of what has been agreed not only to reduce taxes, pensions and other but also to take a new wave of reforms to ensure the exit of the Greek economy from the crisis .

In the field of debt, the International Monetary Fund was also pessimistic, speaking of problems live Indeed, as previously stated, the commitments made by the Eurogroup Finance Ministers in favor of debtors and debtors. a new wave of interventions in 2032 if needed (the IMF deems it necessary) might not be sufficient in the coming years as a "premium" to maintain market confidence

The Fund in its report puts "Asterisks" on the government's development plan, criticizing the shortcomings, but and the security of capitalist banks in the coming years . In banks, he has abandoned his 10 billion euros demanding, but he speaks of the need to have a cushion for future capital needs. There is reference to a possible need of 1.9 billion euros for three banks.

Reduction of tax-exempt pensions without "financial space"
In the financial field, the International Monetary Fund has reduced the amount of redemptions, it is clear that the measures already in place (reduction of pensions in 2019 and not taxable from 2020) are enough to increase and maintain the primary surplus to 3.5% of GDP by 2022. However, he said that this is not enough. is not one at the present time, the application of countermeasures, at least in their entirety.

He also considers that there is no additional "fiscal space". In other words, the margin for additional interventions already included by the government in the medium term 2019-2022 budget (starting with a tax reduction of 700-800 million euros from 2019).

In the structural area, the Fund specifies that it should not be the reforms of collective bargaining are reversing, and too much attention should be paid to it. increase of the minimum wage. It is also considering a new round of product market reforms to support the competitiveness of the Greek economy

It also refers to a number of risks that the Greek economy will face in the future. months and years to come . As the most fundamental, he considers the election, the risk of overthrowing those that have been realized and agreed, because of the pressures that will intensify because of the electoral cycle
It also refers to very difficult budget targets (even if they are tempted to reach them) can be reversed by the actual data). He also talks about the risks badociated with pending court decisions and the reluctant pressures that the measures themselves may cause, also calling for a change in the policy mix by finding the financial space (through cuts in spending and other interventions). reduce insurance contributions and high taxes (exemplifies the removal of all exemptions in the field of VAT in order to unilaterally reduce rates)

Bell of Debt
In the field Thus , he believes that debt sustainability is deteriorating and that it will become unsustainable from 2038. (19659003) The International Monetary Fund considers that the commitments contained in the June agreement of the Eurogroup on new interventions in 2032 "would not be sufficient if they were deemed necessary". As announced yesterday, it is estimated that this step is approaching, and that Greece will borrow more than the markets (since the cheap debt of the memoranda will be replaced by more expensive purchases), investors will question its viability, with [19659003] Reaction of Athens
The observations of the International Monetary Fund prompted the reaction of the Greek side, as evidenced by the three-letter letter from the representative of Mr. Psal which appears in the published package of documents yesterday under Article 4 of the Statute of the Fund.

appoints the IMF for its positions, stands for a regularly pessimistic attitude of the Fund, asks to make public the detailed data on the (19659003) The IMF announces that it will present a new report on Greece at the beginning of 2019 and will then conduct a semi-annual audit of the Greek economy

Read more:

– IMF: Insufficient for the markets the Eurogroup agreement on debt – New interventions needed

– 8 + 4 risks to the Greek economy

– IMF: Greek banks should consider raising capital [19659019]! Function (f, b, e, v, n, t, s) {
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