Tsipras govt eyeing “attractive package” to allay possible internal opposition to looming compromise

The Greek government will accede to creditors' demands?

Growing speculation in Athens this week that the leftist Tsipras government will accede to creditors’ demands for “precautionary measures” to apply after 2018 -but with immediate enactment- was underscored on Tuesday evening with the convening of the ruling party’s political council.

The chairing of the session by Greek Prime Minister Alexis Tsipras was viewed as an effort to prepare the ground, within the once virulently anti-bailout party and its Parliament group, and ahead of a looming compromise with creditors.

The emphasis now for the leftist-rightist coalition government is to finally conclude the now delayed second review of the Greek program (third bailout).

Nevertheless, disagreement over fiscal targets after 2018 and the sustainability of the massive Greek debt are now intrinsically linked with the second review, with the embattled Greek coalition finding itself in the middle of high-profile disagreements between the IMF and European creditors over the Greek program.

According to reports, the government and the ruling party’s leadership are eyeing an “attractive package” of off-set measures in order to allay possible hostility by majority MPs.

Tax cuts for small-to-medium-sized businesses, a possible reduction in VAT rates for islands, a lowering of the property tax (ENFIA) for certain “special” categories of owners (probably low-income taxpayers etc.) and possible tax breaks for other categories of professionals are unofficially being circulated by the government side to its Parliament group.

Conversely, other reports point to the government as ready to accept the IMF’s demands for labor sector liberalization.

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