eKathimerini — An attempt by the government to offer a compromise solution to the stalemate between Europe and the MF over the Greek bailout was rejected by the IMF.
While Athens appears ready to appease creditors’ demands for guaranteed fiscal targets after 2019 by extending the operation of the automatic fiscal mechanism (known as ‘the cutter’) beyond 2018, with the inclusion of cuts to pensions and the tax-free ceiling, the International Monetary Fund is resisting anything short of binding legislation by the Greek government ‘here and now’ if Europe does not agree to reduce primary surplus targets of 3.5% for the years after 2018.
IMF officials say that such a concession would probably not be enough, and point to a recent article by Poul Thomsen, in which the former head of the Fund’s mission to Greece made it clear that a reduction in the tax-free threshold and further social security reforms are interventions that are required anyway. They added that therefore they should not form part of the so-called “cutter”.
