Before the conclusion of the third bailout program in august, greek finance minister euklid tsakalotos once again presented a comprehensive reform and savings program to the parliament in athens on friday evening.
The approval by the deputies this thursday is considered certain, but it is also necessary. On 21. June eurogroup to discuss possible measures to reduce greek debt mountain.
Pension cuts, increases in pension contributions and lowering of the tax-free allowance are expected to save a good five billion euros by 2022. The reform package also includes insurance for creditors: if greece defaults on one or more installments of its debt in the coming years, creditors will be able to independently sell assets of the greek state through the european stability mechanism (ESM) to collect the money.
Athens hopes to achieve relatively rough primary surpluses in the budget (excluding debt service): lenders are demanding a plus of 3.5 percent. Athens aims for 3.56 percent of economic output this year, 3.96 in 2019 and 4.15 in 2020. For 2021, 4.53 percent and for 2022 as much as 5.19 percent are planned.
With a primary surplus of 3.5 percent, athens can service its debt, according to european lenders. With surpluses beyond that, head of government alexis tsipras wants to support socially weak sections of the population and boost the economy with government investments.