A close-watched meeting will come on Monday afternoon in Athens between ESM Managing Director Klaus Regling and new Greek Finance Minister Christos Staikouras, this first time the head of the Eurozone’s emergency bailout mechanism will have talks with Greek leadership after last week’s general election.
According to reports, the most important item on the agenda of talks is the annual primary budget surplus target – 3.5 percent of GDP – that Greece must record every year until 2022. European creditors and institutions have been loath to cut the ambitious fiscal target, maintaining that a high primary budget surplus, as a percentage of GDP, ensures that the country’s is meeting its debt obligations.
Conversely, while in the opposition the now ruling New Democracy (ND) party and its leader, Prime Minister Kyriakos Mitsotakis, repeatedly cited the need to slash the fiscal target, in order to keep more resources and capital in the real economy and to keep recovery growing strong.
