New measures of up to 29 billion euros by Lagarde

The exchange for the next tranches will prove a daunting task for the Greek people. In its report accompanying the release of the 2.2 billion installment, the IMF sees a primary surplus of 5% from 2014 onwards. It also describes the hidden measures of 29 billion for the 2013-2014 period, which include the slashing of pensions.

According to the report, the financial targets have been redefined and require greater efforts to adapt to a primary surplus of 5% of the GDP in 2014 (instead of 2.8%), with the expectation that they will not fall below 4% by 2020.

The agreed objectives of the program will be maintained for 2012-13. However, a significant effort is already required for this year: 8% GDP measures for the objectives of the 2011-12 biennium (about 16 billion euros) and an additional 6% of the GDP (another 13 billion) for 2013-14 to achieve the primary surplus of 5%.

The report describes the main lines and where the figures of new measures of 2011-2012 will come from:

- an additional 2-billion revenue this year and another 8 billion in 2012, mainly from cuts in tax breaks, and about 4 billion by 2012 from the property fee included in PPC bills

- a total of 1% of the GDP or 2 billion from pension spending affecting by ¾ the main and supplementary pensions

This is all within a very difficult economic and social context, with recession at 6% in 2011 and 3% in 2012 and unemployment at 17% this year and 19% in 2012.

The report also provides for a review of the parameters of labor law in the labor market. The authorities intend to initiate a dialogue with the social partners on the national collective agreement before the end of the year.

The report's authors say that "while maintaining a minimum wage and basic conditions of security for all employees is of paramount importance, the level of the minimum wage - which has grown rapidly in recent years and is relatively high - should be reconsidered."

Also, they state that it is necessary to reach an agreement with bondholders on the new PSI. "The previous agreement of July 21 could not have been operational." The public debt is expected to peak at 187% of the GDP in 2013 and decrease to 152% by 2020. The purely external debt is expected to peak at 128% of the GDP in 2012 and drop to 96% by 2020.

With almost global participation of individuals in an exchange of debt at 50%, with a low coupon bond, and with new EU support at a rate of about 4%, the debt could reach 120% of the GDP by 2020 (the maximum level considered sustainable for the country's access to the bond market).

However, if participation is smaller than the debt, it could be stuck at 145% of the GDP.

Thus, a sustainable state for the debt will depend on whether the negotiations achieve their goal of a 100-billion impairment as long as there is universal participation.