German praise for Greece’s 2016 Economic Performance

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German economist Klaus Regling praised Greece’s economic performance for 2016 in an interview with Spanish media, saying that the European Union is now more optimistic because the data is better than expected.

Regling, who is the  Chief Executive Officer of the European Financial Stability Facility and Managing Director of the European Stability Mechanism said the EU is more optimistic than International Monetary Fund (IMF) as there are still few differences between the Fund and the EU on how to proceed with the Greek programme.

“There are disagreements in two areas: the IMF is more pessimistic regarding growth. We are more optimistic because we have incorporated performance in 2016, which was better than expected. Once we get all the figures from Athens, we’ll have a clearer picture of the situation. I hope we’re right because that would make it easier for Greece,” he said.

Regling believes there is support to offer Greece debt relief measures but only once the reform program is finished.

“Several national parliaments approved the Greek program only on the assumption that the IMF would participate,” he noted.

Responding to the contentious 3.5% target for a primary surplus which many have said was not realistic and burdensome for Greece, Regling claimed the Greek government has said it is achievable.

There’s no disagreement on the level of primary surplus required – it was signed by all the leaders including Prime Minister Tsipras. According to our estimates, the measures already taken are sufficient for Greece to meet that goal in 2018,” he said, noting the question is how long the country will have to maintain it.

“That topic is open to discussion, because the agreement says it has to be reached in 2018 and be kept in the medium term. There is no definition of what medium term means but we have time to agree on that,” he said.

GCT Team

This article was researched and written by a GCT team member.