The coordinator of the Parliamentary Budget Office (PBO), an independent body unaffiliated with the government, on Wednesday warned that the country’s exit from the era of bailout memorandums, set for next August, “won’t resemble the beginning of a honeymoon”.
As in previous cases, PBO chief Panayiotis Liargovas once again dampened the leftist-rightist coalition government’s “best-case scenario”, saying the end of the third successive bailout does not mean an end to supervision by institutional creditors.
Moreover, he reminded that a full return by the country to sovereign capital markets, if successfully achieved, will come with higher borrowing costs – more-or-less echoing practically all forecasts by mainstream money market analysts the world over.
In a thinly veiled criticism of practically all of the Tsipras government’s short-term economic goals, Liargovas called on the beleaguered government to reconsider “if it is useful to exceed foreseen primary budget surplus (targets).”
While Athens is apparently on track to meet and even exceed fiscal targets mandated by creditors, the country’s political opposition and business groups point to a “tax tsunami” imposed in 2016 as overwhelming the real economy and the middle classes.
Liargovas added that discussion on lowering primary budget surplus targets (as a percentage of GDP) should commence with creditors, in tandem with a permanent resolution to the debt relief issue, “as the government and opposition agree (on this issue) and have the IMF as an ally”.
The head of the Parliament office said surpluses beyond agreed to fiscal targets with creditors could reach 7.4 billion euros over the 2016-18 period, a sum he warned may have negative effects on the country’s still feeble growth rates.
“We’ve committed to a series of fiscal targets for the next few years after 2018 … the country after 2021 must maintain high, and possibly unattainable primary budget surpluses until 2060,” he underlined.
