Tax-free ceiling cut up in the air too

After the claim to negotiating the prevention of pension cuts, Finance Minister Euclid Tsakalotos stated on Wednesday in Parliament that the government will also seek to avert the reduction of the tax-free ceiling from January 2020, in an effort to cancel the entire agreement with its creditors voted by the House just a year ago.

This is seen as a high-risk move, as there are fears it may generate a negative reaction on the markets if it is viewed as a sign of backtracking on what has been agreed. This is also the reason for the reserved - if not negative - attitude of the European creditors regarding the non-implementation of the pension cuts. The International Monetary Fund considers the pension cuts a structural measure and it is certain to have the same view on the tax-free ceiling reduction.

Tsakalotos acknowledged on Wednesday that the fiscal space exists for...