Greece’s Tsipras Calls for Prompt Completion of Bailout Review

Bailout Challenges: What's Ahead for Greece?
  • Country needs ECB’s bond buyback program for markets return
  • Broadening tax base could lead to tax cuts in next 2 years

Greek Prime Minister Alexis Tsipras called for immediate completion of a review of the country’s bailout program and a final decision on debt relief that would pave the way for its return to bond markets.

Greece needs to “positively complete” the second review of its bailout program as soon as possible, Tsipras said during a speech in Thessaloniki. The country must also join the European Central Bank’s bond buyback program, “which will act as a catalyst for reducing borrowing costs, restoring liquidity, lifting of capital controls and an exit to markets,” Tsipras said in comments broadcast live on state-run ERT3.

Tsipras’s comments came as euro-area finance ministers sounded an alarm Friday about lagging Greek economic reforms, saying the nation still has much to do to qualify for its next aid payout. Greece has met only two of 15 conditions that would qualify it for another 2.8 billion euros ($3.1 billion) and trigger the start of talks on debt relief.

While the Greek government has time to qualify for the payout before it expires at the end of October, any persistent delays risk clouding the outlook for the next international review of Greece’s bailout and the prospects for debt relief. In Friday’s meeting, Greek Finance Minister Euclid Tsakalotos urged his counterparts to reach a decision on short-term debt relief for Greece this year and to discuss specific options for medium-term relief.

Tsipras also said in his speech that if Greece can maintain the lowest-possible budget surpluses and broaden its tax base, his government would be able to move forward with tax cuts in the next two years. Indirect taxes could be reduced and the county’s property tax could be replaced with a fairer tax, Tsipras told a crowd of officials and businessmen attending the annual Thessaloniki International business fair in northern Greece.

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