With the tourism gradually on the rise, the government wants to avoid rocking the boat and risk having massive tension and demonstrations in down town Athens. The Prime Minister Antonis Samaras is expecting the troika representatives with two requests, be given an extension to finalize the list of public sector layoffs and to reduce the VAT on food from 23% to 13%.
The VAT reduction proposal was put on the table at the late afternoon Monday meeting with European Commissioner Algirdas Šemeta, who was hesitant to respond. The IMF’s Christine Lagarde was equally reserved and commented on state television station Net that such a request could only be accepted under conditions, while urging the government to not relax its efforts.
Mrs. Lagarde’s comments indicate how worried the IMF is about the progress of reforms in Greece and recognizes that the government is showing increasing signs of fatigue. In conjunction with the reluctance of creditors to put the pressure on the Greek government due to the upcoming German elections, many ministers have developed a false sense of security, which has invariably lead to a number of delays.
Amongst these delays is that of finalizing the list of public sector dismissals, which was agreed upon to be ready so that the first 2,000 dismissals took place in June. The government is going to argue that since this is such an important milestone in the state structure, more time is needed in order to better prepare.
