EU sees growth if re­forms pass

Over­shoot­ing pri­mary sur­plus tar­gets should not lead to re­lax­ation of aus­ter­ity mea­sures, Com­mis­sion says

Kathimerini English - - Focus - BY ELENI VARVITSIOTIS

BRUSSELS– The Euro­pean Com­mis­sion fore­sees a strong re­bound for the Greek econ­omy in 2017 and 2018, and also ex­pects the pri­mary bud­get sur­plus tar­gets to be beaten, but it dis­cerns some risks too, ac­cord­ing to its fall fore­casts is­sued yes­ter­day.

The Com­mis­sion es­ti­mates that Greece’s gross do­mes­tic prod­uct will grow 2.7 per­cent next year and 3.1 per­cent in 2018, against a 0.3 per­cent con­trac­tion this year. These fig­ures are com­pat­i­ble with those of the bailout agree­ment. The re­port ex­plains that the re­cov­ery will be based on an in­crease in do­mes­tic de­mand, in ex­ports and in in­vest­ments.

Brussels projects the pri­mary sur­plus at 0.8 per­cent of GDP this year – against a tar­get for 0.5 per­cent – and sees that ris­ing to 2.1 per­cent next year (com­pared to a 1.75 per­cent tar­get) and 3.7 per­cent in 2018 (with the tar­get set at 3.5 per­cent).

Asked whether the ex­cess in the pri­mary sur­plus fig­ures could lead to the adop­tion of fewer mea­sures by the Greek gov­ern­ment, the Com­mis­sion said that the mea­sures can­not be re­duced and are tan­gi­ble proof that the tar­gets set in Greece are achiev­able.

The re­port also ex­pects the na­tional debt to climb from 177.4 per- cent of GDP last year to 181.6 per­cent in 2016, be­fore start­ing to drop in 2017. Un­em­ploy­ment is seen de­clin­ing to 22.2 per­cent in 2017 and 20.3 per­cent in 2018, re­flect­ing the im­pact of the eco­nomic re­cov­ery on the la­bor mar­ket.

In re­sponse to a ques­tion about whether the elec­tion of Don­ald Trump as US pres­i­dent could change any­thing re­gard­ing the In­ter­na­tional Mone­tary Fund’s par­tic­i­pa­tion in the Greek pro­gram, Eu- 1.1022 ro­pean Com­mis­sioner for Eco­nomic Af­fairs Pierre Moscovici said that he would not dis­cuss the Fund’s at­ti­tude to the po­lit­i­cal de­vel­op­ments in the United States.

“We are try­ing to move into a vir­tu­ous cir­cle with Greece,” the French com­mis­sioner said, adding that the tar­get now is for “the bailout to be a suc­cess, for re­forms to be ap­plied cor­rectly, for growth to re­turn and for con­fi­dence and em­ploy­ment to be re­stored.”

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