“Honest trade”: Greece will reduce pensions and tax-free limit and take debt restructuring and lower primary surplus

This is the lenders’ expected offer

A new scenario has surfaced in the last hours. According to Newmarket.gr, the French Minister of Finance Michel Sapin asked from the CEO of the Greek National Bank, Mr. Stournaras to send him analytical data on the formula the GNB has prepared for the improvement of the Greek debt profile as well as the reduction of the primary surplus to 2% instead of 3,5% starting from 2021. The idea is that the GNB plan will be accepted by the lenders and Greece will accept the lenders’ position regarding the pensions and the tax-free level.

According to EU officials on the side of the 2nd Delphi Economic Forum, this proposal could help the negotiating parties to finally conclude the evaluation.

There must be a “Staff Level Agreement” first, which must be officially confirmed on the Eurogroup of March 20th or April 7th, after which the Greek government must pass the new measures from the Parliament. These must be effective from 2019 and they will include the further reduction of pensions and the tax-free level, while the counter-measures that are meant to balance these reductions, will be effective only in case the primary surplus goes higher than 3,5%. The counter-measures will be growth-oriented.