The Eurogroup has given the official green light to the new aid package for Greece. Under the second economic adjustment program for Athens, the one approved today is the second payment and it is valid overall 49,1 billion euros. The money will arrive in Greece in several tranches.
In December, 34,4 billion will be paid in Athens, with the participation of the International Monetary Fund. Of this sum, approximately 24,1 billion will be allocated to the recapitalization of Greek banks, while 9,3 billion will be used to pay the state debt to the private sector of the economy.
The remaining 14,7 billion will arrive in installments by the end of the first quarter of 2013, to counter the depressive effect of the austerity measures approved by the Greek Parliament.
"We are ready to do even more if Athens keeps its commitments on fiscal consolidation and structural reforms“, said the president of the Eurogroup, Jean-Claude Juncker, underlining that “Greece is back on the right track”, but it will have to reform its tax system.
In the final statement, the Eurogroup "welcomes the result of the debt repurchase operations, which will lead to a substantial reduction in the debt-to-GDP ratio in Greece". The success of the buyback, “together with the initiatives agreed on November 27 and a complete implementation and adjustment of the programme, should bring the Greek public debt to a sustainable level, at 124% of GDP in 2020. Greece and the other eurozone member states are ready to take additional measures, if necessary, to ensure that the objectives are achieved”.
On this basis, "the Member States have authorized the European Financial Stability Facility (EFSF) to pay the second installment".
Secondo Christine Lagarde, director of the International Monetary Fund, the new aid to Greece "ensures the sustainability of its debt". Lagarde then explained that she intends to recommend to the IMF directorate to complete the analysis of Greece's recovery programme. An IMF board meeting on Greece could take place in January.
Meanwhile, the tripartite coalition that supports the government of Antonis Samaras is working, with the assistance of the Task Force of the EU Commission and the Troika (EU-ECB-IMF), on tax reform invoked by Juncker.
In particular, the project envisages easing taxation on the lowest incomes, raising the "no tax area" from 5 to 9 euros of income, increasing tax deductions for large families and also stabilizing the tax system for businesses.
Furthermore, by next spring, the rules to combat tax evasion, which in Greece is worth 30% of GDP, will have to be promulgated. The anti-corruption measure is linked to this provision, a scourge that costs an amount equal to 10-15% of the Greek GDP.
