Greece entered a week at high risk, with two major tests Monday, July 20 for the economy and Prime Minister Alexis Tsipras: the reopening of banks and a VAT increase of 10 points on a series of goods and services . Banks, closed since June 29, should reopen under a decree published Saturday by the government revamped to evict rebellious ministers.
The restrictions and capital controls remain in place, with flexibility . Limiting cash withdrawals is set at 420 euros per week instead of 60 euros per day, to avoid the Greeks to redo every day queuing to the distributor. Exceptions are also created for those to pay for medical care or education abroad.
VAT happening at the same time from 13% to 23% for non-perishable food and catering, but as taxis racing, condoms, or funerals. It remains unchanged at 13% for hotels, and is slightly reduced to 6% for medicines, books and theater tickets. The government expects annual additional revenue of some € 2.4 billion from 2016 and 795 million euros this year.
The German supermarket chain Lidl has offered from Sunday advertising inserts in the Greek newspapers to announce that she will not have repercussions on prices upward.
3rd bailout plan
The Greek Parliament voted Wednesday in pain these increases VAT, in accordance with commitments made at an EU summit in Brussels hectic. In exchange, partners have pledged new aid plan, the third since 2010. Athens is to receive an emergency loan of € 7 billion which will be reimbursed quickly engulfed by Monday at the European Central Bank (4.2 billion euros) and the settlement of arrears to the International Monetary Fund (2 billion).
Still, German Chancellor Angela Merkel reiterated Sunday its opposition to a reduction “classic” Greek debt, considering that such a “haircut” could take place “in the monetary union.” “Greece has already obtained relief,” she recalled. “If the program review to be negotiated is successful, we will again discuss them.”
For the first time in months, experts from the ECB, the IMF and the European Commission , formerly known as a training “troika” and that symbolized for the Greeks a guardianship of their country, are expected in Athens this week. They will assess the state of tried Greek economy by financial restrictions.
‘Crash test’ in order to Tsipras
The week will also be crucial for the future of Prime Minister Alexis Tsipras, whose mother assured a Greek tabloid that he “could not sleep” nor “eat more.” The Brussels agreement requires the vote next Wednesday for further reforms (Civil Justice, banking law). According to the newspaper Avgi, near SYRIZA Mr. Tsipras wants to make this new vote a “crash test” and resign if the defections are increasing. Last Wednesday, he had lost 39 votes of the 149 deputies in his radical left party, some elected officials saying he had betrayed the July 5 referendum. The Greeks then overwhelmingly voted against a continuation of austerity.
M. Tsipras even recorded critics of Nobel economist Paul Krugman, until now one of the most vocal detractors of the austerity measures imposed on Athens: “I may have overestimated the competence of the Greek government.”
The creditors must in turn get on track a new aid plan for Greece, over 80 billion euros over three years, overcoming their differences. Illustrating the frictions, the French finance minister on Sunday swept idea dear to his German counterpart Wolfgang Schäuble temporary exit of Greece from the euro. “Either we leave the euro, either we stay,” said Michel Sapin to the Greek weekly To Vima. The Greek newspaper Kathimerini center-right showed him that a dozen officials from the European Commission had prepared a secret plan of action in case of a Greek exit from the euro, a risk that is not yet completely ruled out .
(With AFP)
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