Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Greece passes fast-track reform package to unlock bailout cash

Published 06/14/2018, 11:00 AM
Updated 06/14/2018, 11:10 AM
© Reuters. Greek Parliament votes on reforms agreed with the country's international lenders in Athens

© Reuters. Greek Parliament votes on reforms agreed with the country's international lenders in Athens

By George Georgiopoulos

ATHENS (Reuters) - Greece's parliament on Thursday passed a fast-track reform package to unlock bailout funds and wrap up a fourth and final review of its loan program as it seeks more debt relief from its official creditors next week.

Greece is due to exit its latest bailout program in August and will then have to rely on financial markets to cover its borrowing needs.

The country has a debt-to-GDP ratio of 179.8 percent, the highest in the 19-nation euro zone.

Athens is keen to pass the final review of the country's compliance with reforms prescribed in its bailout before a euro zone finance ministers meeting on June 21.

A green light on the review would release about 12 billion euros ($13.97 billion) of new loans from Greece's latest 86 billion euro bailout, its third since 2010.

The final payment from the bailout funds would add to a cash buffer the Greek government is creating and could serve as a fall-back option for refinancing needs.

Lawmakers passed the reform package 154-to-144 in the 300-seat parliament. It was endorsed by lawmakers of the leftist-led alliance while all other opposition parties voted it down.

"This government smothered Greeks with taxes. It crushed growth and pushed the middle-class to poverty," said conservative opposition leader Kyriakos Mitsotakis during a heated debate on the reforms bill.

"You created a large mass of desperate people who are drowning in debt and have no hope for the future," he said.

Athens has agreed to adhere to a post-bailout fiscal trajectory that targets primary budget surpluses - excluding debt servicing outlays - of 3.5 percent of GDP until 2022 and of at least 2.0 percent thereafter.

This gives the government little room for maneuver for tax relief unless it fiscally outperforms, generating even larger budget savings.

The reform package legislation includes measures to expedite privatizations in the energy sector and tweaks in real estate taxes. It also outlines measures that will go into effect in the post bailout period such as extra pension cuts in 2019 and a lower tax exempt threshold in 2020.

© Reuters. Greek Parliament votes on reforms agreed with the country's international lenders in Athens

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.