In statements to The Guardian today, Finance Minister Euclid Tsakalotos said that “after seven years of deep recession, no government would accept the measures requested by the IMF.” He also insisted that Athens has not agreed to pursuing a primary surplus of 3.5% of the GDP at the end of the program. Instead, he explained that the Greek government had offered a compromise solution when Eurozone finance ministers convened on December 5.
Tsakalotos invoked the name of British philosopher JL Austen saying that the Oxford-educated intellectual was particularly critical of forms of argument that relied on saying something and then taking it back. “In effect it [the IMF] is arguing for Greek pensioners and poorer wage earners to make further economies, while it economizes on the truth,” stated Mr. Tsakalotos.
Tsakalotos disputed Poul Tompsen's claims about the government paying public pensions at the level of the richest European countries, saying:“Greek expenditure on both
pensions and other subsidies is about 70% of the EU average and 52% of that of Germany. Is it likely when around 45% of pensioners receive monthly payments below the
poverty line of €665, and almost four million people, that is more than a third of the population, have been classed as being at risk of poverty or social exclusion, that Greece’s
main problem is that pensions and tax credit allowances are too generous?”
He also added: “Some member states were supporting the position that the 3.5% figure should be preserved for ten years; others were working towards a compromise of five years. The Greek position was that neither would work for Greece and we suggested the compromise of going down immediately to 2.5%, but agreeing with the institutions that the one percentage point reduction from 3.5% should be spent entirely on reducing taxes on small and medium sized enterprises, thus enhancing competitiveness and growth. What was the IMF response? The IMF argued within the Eurogroup that: “It doesn’t matter to us whether it is three, five or ten years of high surpluses, we will still need to see more measures to make the numbers add up since we don’t think that 3.5% is achievable without such measures”. It did not bother to address our compromise suggestion. So Greece has not “agreed” to anything yet. However, it is under intense pressure from its creditors to do so. The IMF has done little to alleviate that pressure. Instead of having the courage of its convictions and helping us reduce the size and/or the timespan of the surpluses, it is putting all the pressure on us to specify new austerity measures for 2019 and beyond.”
