By. V. Kostoulas
Eurogroup chairman Jeroen Dijsselbloem on Wednesday severely dampened the latest round of “debt relief” speculation in Athens by reiterating that European creditors will not discuss lowering primary budget surplus targets through 2018 or adjusting conditions for debt relief until the current bailout program is fully and successfully concluded.
The current program, or third memorandum, is set to conclude in 2018, with European leaders repeatedly saying there will be no fourth bailout for recession-plagued and debt-laden Greece.
Speaking to Greek reporters in The Hague, the Dutch finance minister assessed that after 2018, and given that the program has been successfully implemented, interventions will nevertheless be necessary to ensure the Greek debt’s sustainability, a position vigorously supported by the IMF.
He also said that after recent deliberations, a yearly goal of a 3.5-percent primary budget surplus, as a percentage of GDP, has been designated a “medium term” target, instead of a long-term one, “meaning in the next 10 years”, as he clarified.
The leftist Tsipras government has promised to deliver a 3.5-percent primary budget surplus goal for 2018, a number that the IMF deems as unrealistic, and which over the last month has also figured prominently in the center-right main opposition’s “calculus” for economic recovery. New Democracy (ND) leader Kyriakos Mitsotakis recently said the goal is too high and should be cut.
Dijsselbloem added that if all goes according to plan, a reduced target can be achieved gradually, i.e. 2.5 percent and then 2 percent of GDP.
