A recent meeting of the current Greek leadership party’s
political council, chaired by Prime Minister Alexis Tsipras, has fueled
speculation that the party will agree to demands from European creditors to
conclude the second review of the Greek program.
Although the party was previously against bailouts,
the recent session was seemingly a preparation for the party and its Parliament
group to accept the measures demanded through disagreements between European
creditors and the International Monetary Fund (IMF) over the third bailout. As the Greek government prepares
to negotiate with creditors, discussions about the second review are now
affecting disagreements over fiscal targets for 2018 and beyond, as well as the
sustainability of the country’s debt.
Tsipras’ government is considered likely to agree to
precautionary measures demanded by creditors but is reportedly working to
create an attractive package of tax cuts that would go toward mitigating the
effects those precautionary measures and help keep majority MPs on side. The
package allegedly includes measures like tax cuts for small and medium
businesses, reduced VAT rates for islands, lower property taxes for some owners
– likely low-income taxpayers – and other tax cuts fro some categories of
professionals. Other reports, however, suggest that Tsipras’ government may
agree to the IMF’s demands, which call for a liberalized labor sector.
