Focus on budget targets
Tsakalotos heads to Eurogroup to push for relaxed primary surpluses after 2018
Even though Greece will not be the topic of discussion at today’s Eurogroup, Finance Minister Euclid Tsakalotos heads to Brussels with the aim of changing and lowering the budgetary surplus targets Athens has to meet after 2018.
“We must open the discussion of targets,” a senior Finance Ministry official said, referring to Greece’s bid to gradually scale down the 3.5 percent of GDP budgetary surplus, required from it in 2018, to 2.5 percent in the period stretching from 2019 to 2021 and down to 2 percent from 2022 onward.
Greece insists these targets will not compromise the sustainability of the country’s debt and wants the approval of the creditors as soon as possible so as to enshrine the figures in the midterm program for 2017-21.
However, the government will have a tough time making its case as Northern European countries such as Finland, Germany and others have expressed opposition to changes to budgetary targets.
For the new review, which requires equally tough measures in order to be completed, Athens wants the relaxation of budgetary surplus targets after 2018 in exchange.
The German government does not want to begin any discussion on the budgetary surplus before elections are held there in 2017.
“The surplus is the flip side of the discussion about the debt,” a government source said, adding that German officials are citing Brexit to justify their opposition and that any sign of relaxation toward Greece will only encourage Euroskeptics.
“They are not saying an outright ‘No.’ They are just saying that now is not the time to open the discussion,” the source said.
According to Finance Ministry officials, the midterm program legislation will be ready by July 18, but a source said this will be unlikely if there is no deal on budgetary targets – hinting that negotiations could drag on as Greece has “enough funds” at the moment to meet its obligations.