Eurogroup points to Easter as completion date of Greek program evaluation

Poul Thomsen stated that pension cuts are necessary

Greek government will be engaged in tough and difficult negotiation talks as yesterday’s Eurogroup meeting showed.

Greece’s lenders are asking the government to take decisions, which are becoming more and more difficult, as the completion of the Greek program evaluation has been delayed, proving that Jeroen Dijsselbloem statements in January, who claimed that “evaluation will take months to complete”, were not at all assumptions.

Moreover, Commissioner Pierre Moscovici said that negotiation talks will end by Easter, while Poul Thomsen posted a statement on IMF blog saying that pension cuts are necessary because there is nothing else left from which reductions could be made.

” But can’t Greece protect pensioners by cutting somewhere else or increasing tax rates? There is some scope for those measures, but it is very limited. Most other spending has already been cut to the bone in an effort to protect pensions and social payments, while the failure to broaden the base and improve compliance has already caused too much reliance on high tax rates” he said .

“To reach its ambitious medium-term target for the primary surplus of 3½ percent of GDP, Greece will need to take measures in the order of some 4-5 percent of GDP. We cannot see how Greece can do so without major savings on pensions.” Thomsen added.