When and how will Greece reduce its primary surpluses targets

When and how will Greece reduce its primary surpluses targets

The primary objective for the Greek government is to reduce the targets for primary surpluses. A prerequisite for this is the creditworthiness of the Greek economy in order to rise to higher investment grades, which will allow the Greek side to negotiate surpluses below 3.5% of GDP, which in theory remain “locked” until 2022.

A first start could be made with the 2020 target, since “key” reforms linked to “red” loans and the new first home protection framework will proceed on the basis of the “checks” requirements of the enhanced surveillance program and will lead to a reduction in borrowing cost for the Greek state. Therefore, next week, a new exit towards the international markets may be made in order to raise 2 billion euros by issuing a bond of 10 years’ duration, sending messages of optimism and confidence, thus attracting foreign investment and contributing to the positive course of the Greek economy.

As government sources said yesterday, reducing surpluses would reduce the Greek debt service contribution, and similar moves should be made on the part of the partners in order to bridge this gap. At the same time, the government is speeding up the moves, in view of the Eurogroup of 11 March, on two key issues.

The first is about the succession of the “Katselis Law”, where with new videoconferences during the weekend an agreement with the institutions on the final draft will be seeked, so that it will be voted by next Thursday. A government agent with knowledge of the matter said that the main objections were raised by the ECB due to the fact that the European Central Bank had the earlier the draft of the government-banking agreement last Wednesday. The second issue concerns the sale of PPC’s lignite plants, where agreement should be reached on how the new tender will take place.

Institutions’ officers are expected to return to Athens initially near Easter and after May or June./IBNA