Greek FinMin appears optimistic over looming conclusion of review; admits to errors

Tuesday, 28 March 2017 22:42
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Greek Finance Minister Euclid Tsakalotos appeared optimistic on Tuesday that the delayed second review of the bailout program "will conclude sooner than you expect," even as no date has been given for a return of creditors' negotiators to Athens and with heightened reactions this week surrounding the prospect of a memorandum-mandated partial sell-off of the state-run power company's production units.

The review, which is now delayed for a year, must be concluded in order for bailout financing to continue to flow into Greek state coffers, given that the country still cannot reasonably expect to borrow from the markets.

Speaking at a conference hosted by Parliament's independent Budget Office, Tsakalotos told participants that "what we don't need is more austerity; we're reaching our target."

He also lobbed criticism at the opposition, referring an "external IMF" and an "internal IMF", i.e. the more pro-reform and pro-market center-right main opposition.

However, at the same time, the UK-trained academic engaged in a brief bout of self-criticism, albeit in a class struggle context: "Is there a problem with taxes? Yes there is. Have we squeezed the middle classes? Yes, we have squeezed them, because we have assumed a commitment to the poorer strata (of society) ... we made a mistake in our forecast of how quickly we can deal with the issue of tax evasion and corruption."  

In a return to a more upbeat tone, he said once the second review is concluded then discussion will begin, with creditors, on the issue of debt relief.

Tsakalotos said a clarification of debt relief measures will "send a message to the markets", due to the IMF's participation in the program, and will allow for Greek bonds' inclusion in the ECB's Quantitative Easing (QE) stimulus program.

Finally, he said most economists agree that an annual primary budget surplus target of 3.5 percent of GDP for a lengthy amount of time is "not possible". 

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