Bankruptcy looms without debt reprofiling

The Greek Parliament’s Budget Office is warning that without bold interventions, the debt will skyrocket after 2021.

“Without significant reduction of the debt, Greece will go bankrupt,” the office stated.

For this reason, the budget office stresses the importance of faithful execution of the adjustment programme until it ends in August, so as to secure the next step in debt reduction.

The quarterly report also underlined that long-term development prospects remain doubtful as long as basic structures and institutions of the country are not reformed.

The report also stresses taxpayer exhaustion and inability to pay, which will affect the achievement of fiscal targets over the coming years. The trend of exceeding targets agreed to with creditors “choke development”, and the high primary surpluses agreed to with creditors are not viable, the report states.

Nine recommendations

The parliamentary budget office report also outlines nine recommendations for future government fiscal policy.

1. Expedite structural reforms that contribute to increasing productivity and diffusing technology and, consequently, increasing the prospective production capacity.

2. Intensify efforts to regulate the problem of non-performing loans.

3. Continue efforts to bolster social cohesion, reducing the burden of fiscal adjustment for lower income classes.

4. Complete the spending review.

5. Intensify efforts against tax evasion, beginning with the most obvious and biggest opportunities for tax evasion, which are linked to petrol trade.

6. Encourage clear progress on the problem of non-performing loans, so as to gradually restore the operation of the country’s banking system, providing the economy with necessary liquidity.

7. Exploit fully and effectively and in a timely manner all possible EU funding sources.

8. Execute the budget smoothly, both in terms of revenues and expenditures, so as to avoid further fiscal measures.

9. Continue the payment of public sector debt to the private sector, without accumulating new
debts.

Argyro Tsatsouli

in.gr