Greek compromise proposal meeting IMF resistance

A plan by the government to extend the operation of the automatic fiscal mechanism beyond 2018, with the inclusion of cuts to pensions and the tax-free ceiling, which Athens had intended as a compromise solution with the country’s creditors, is coming up against resistance from the International Monetary Fund for the moment.

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” in case the primary surplus target of 3.5 percent of the gross domestic product is not met.

At the same time, expectations regarding Thursday’s Euro Working Group are very low. “Nothing is going to happen tomorrow,” a senior eurozone official told Kathimerini on Wednesday, explaining that eurozone finance ministry officials will simply review the situation in the stalled talks.