Greek PM, Alexis Tsipras, has moved his campaign against the International Monetary Fund and its intervention in the Greek bailout program to the pages of the Financial Times. Penning an opinion piece in the paper, Alexis offers harsh criticism to the organisation.
“Greece fails to understand why the IMF insists in changing the design of the reforms in a way that leaves their yield and simplicity intact, but makes the reform significantly less progressive, shifting a considerable share of the burden on to the relatively poor”, he states, after an attempt to defend his government’s policy, repeating its commitment “to bringing in long overdue legislation to strengthen the fight against the illegal trading of tobacco and fuel, as well as permanently improving the ability to collect VAT. The result will be a significant broadening of the tax base and improved compliance. It will also restore fairness to the tax system. The income tax reform has three aims: yield, simplicity and progressivity. Indeed, it will simplify the tax system and significantly reduce the incentives for evasion. It will also deliver the fiscal yield that we agreed with the institutions and, importantly, distribute the costs of fiscal adjustment in a socially fair way, requiring more from those who have relatively more to contribute”.
The Greek PM’s article is an attempt to urge the IMF proceed to the swift first review of the European Stability Mechanism programme.” In many ways, this is key as it deals with most of the fiscal and financial measures that the ESM programme contains. And our government is eager to complete it soon. To this end, we have reached agreement with all the European and international institutions monitoring the bailout on the size of the fiscal package that needs to be phased in over the next two years in order to meet the primary balance target of 2018″. The Greek PM proceeds to outline the package, focucing on the “ambitious” reform of income tax reform that is designed to yield additional revenue of 1% of GDP.
Trying to undermine the IMF’s dealing with the greek bailout program, Alexis Tsipras starts by stating that, last October, the Fund “predicted that the Greek economy would experience a contraction of -2.3% of gross domestic product. Instead 2015 was a year of stagnation, with a contraction of -0.2%. This puts the economy in a better position in terms of achieving future fiscal targets”. He then goes on to state that, after six years of” deep and prolonged recession”, during which the economy lost a quarter of GDP, “Greece is now laying the foundations for a sustainable and inclusive recovery”. The PM paints a picture of this fiscal path as being “much milder and much better designed than in previous adjustment programmes”, while mentioning the difficluty of the choices at hand, as well as the effect of the refugee crisis.
Among those not impressed with this PR stint is the leader of the Opposition, Kyriakos Mitsotakis. In an interview to Washington Post, the newly-elected president of Nea Dimokratia went on to predict the SYRIZA-ANEL government’s demise. “[Tsipras] never wanted to implement reforms. This government has done a lot of damage”, he said. . “He is to be blamed for the banks and the fact that the economy is still trying to recover. There’s a level of incompetence this government demonstrates which is just mind-boggling on all fronts, including the migration problem”. As for the lender’s suggestions, the leader of the Opposition seemed to agree with them. “I would go along with a substantial percentage of those reforms”, he said. “I would certainly go along with privatization very aggressively. There are a lot of assets to be sold at reasonable prices. If you really want to attract significant foreign investment, you need to sell off state assets”.
There is one thing on which the leader of the Opposition seems to agree with the Prime Minister: the need for a debt restructuring. “We certainly need an intervention on the debt side”, he said, commenting on the IMF’s view of the Greek debt as “unsustainable”.