Based on a proposed property tax, that should bring in 2B Euros a year in Greece, IMF officials believe the country will continue to get a lifeline and we can kick the can down the road ... again. Personally, I'd just like to see this default over with since pulling this band off over multiple years is trying. But that's me.
Here is the story that seems to have made markets happy.
- Greece's creditors are expected to give the thumbs-up for the disbursement of the next tranche of its 2010 bailout pact later this month after the Greek government announced new taxes to cover a EUR2 billion revenue shortfall, said two senior International Monetary Fund officials familiar with the matter.
- The IMF officials, who have direct knowledge of the talks, warned, however, that this was Greece's last chance and that the scheduled December installment would be more difficult to arrange unless budget targets are met.
- The two IMF officials dismissed speculation of an impending Greek default or exit from the euro-zone. But they said Greece nonetheless remains the biggest problem for the common currency and that it is imperative that Athens follows up on its promises to cut down the public sector and tackle tax evasion.
- "The pressure in Greece has increased from all sides because it has repeatedly failed to deliver what it promises. But there is no real talk on a Greek default or an exit from the euro zone, at least not yet. Such a development would really rock countries like Italy and Spain," one of the officials told Dow Jones Newswires. "The Greeks took new measures which address the shortfall and we expect there will be agreement with the troika for the September loan tranche."
- Finance Minister Evangelos Venizelos Sunday imposed a new property tax over the next two years to cover the EUR2 billion revenue shortfall, in line with a promise to Greece's creditors in exchange for receiving fresh aid.
- Without the aid, Greece will run out of cash within weeks, according to senior Greek officials.
- "I think this is Greece's last chance," the first official said. "If promised reforms are not implemented by the next review in December, things for Greece will become much more difficult with the next loan tranche far from certain. The Greek government knows that emergency measures like new taxes can only get them to a point before the population reacts in a dramatic way. They need sustainable measures with a smaller public sector where everyone is paying his fair amount of taxes. Only then the country can return to a sustainable path."