FX.co ★ Greece adopts new reforms

The parliament of Greece passed the bill which aims to boost tax revenues in an attempt to unlock another tranche of financial aid from the EU.
On Tuesday, May 24, eurozone finance ministers will meet to sign the agreement to provide Greece with the next bailout cheque. Last weekend, the Greek government approved a fresh round of austerity including a tax hike on motor fuel, cigarettes, alcohol, hotels and an increase in the VAT rate from 23% to 24%.
Tax and pensions reforms were adopted by the Greek parliament in line with demands by the country’s creditors. Moreover, Greece has to implement an automatic mechanism for cutting state spending in case the government misses budget targets.
As a result, the Greek parliament supported by the Syriza party approved the measures to reduce the budget deficit by more than 5 billion euros in order to bring its primary budget surplus to 3.5% of gross domestic product by 2018.
At the same time, Germany has reached no consensus yet with the IMF on Greece’s bailout deal. The IMF is skeptical about the EU’s program and insists on partial or complete debt relief for Greece.
On Tuesday, finance ministers will decide on the allocation of the tranche of 11 billion euros out of the 86-billion-euro program.