Greek FinMin: No need for extra austerity measures in 2018

Friday, 15 September 2017 19:56

Greek FinMin Euclid Tsakalotos on Friday forecast that his government will not need to take additional austerity measures in 2018, speaking hours after an informal Eurogroup meeting in Tallinn.

Figures for state revenues over the first eight months of the year, released on Thursday, nevertheless, showed a 1.7-billion-euro shortfall from the target. Sources in the finance ministry, however, blamed the development on change in the date when the first installment of the property tax is due.

Tsakalotos, previously a UK-based economics professor before delving into radical leftist politics in Greece, added that after the conclusion of the third review of the  Greek bailout program, three discussions will take place.

"One will refer to the nature of the exit (from the bailout); another is the debt issue, and we'll make sure that what needs to be done for the debt is crystal clear; the third will be over pending issues related to the program," he said.

However, a handful of variable factors in Tsakalotos' "calculus" include the timetable for concluding the third review, with top European officials on Friday (Jeroen Dijsselbloem and Pierre Moscovici) pointing to the end of the year. In an informal press briefing on Wednesday, Greek finance ministry officials favored early 2018.

Additionally, in terms of Greek debt relief front, there is still little or no common ground between the IMF and European creditors, and especially Berlin ahead of next month's federal election.

Even more complicated is the type of precautionary credit line creditors will extend Greece after the current finance-linked memorandum ends in August 2018, if any.

The Greek premier, Alexis Tsipras, boasted of a "clean exit" during statements at a Thessaloniki trade exhibition over the weekend, a quip passed off by local analysts as appealing to his popular base and part of what's shaping up to be ruling SYRIZA party's future campaign slogan of permanently "exiting the memorandums". 
Nonetheless, the "clean exit" scenario has, according to reports, irked the finance ministry's leadership, which echoes most creditors' view that some kind of support mechanism is necessary as Greece's hedge to markets' appetites and fickleness when it steps outside the Eurozone's "safe space".

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