Greek Government and Institutions agree Primary Surplus will close above Target for 2017

Screen Shot 2017 10 24 at 9.34.37 am

Screen Shot 2017 10 24 at 9.34.37 am

Greek Gov’t and Institutions Agree Primary Surplus Will Close Above the Target for 2017 – ESM to Disburse 800 Milllion Euros of Aid

by Aggelos Skordas

Greek government and the creditors’ representatives reached a convergence of views regarding the country’s primary surplus for 2017, as both sides agreed it will close above the target of 1.75 percent of the GDP, on Monday. Talks between Greece’s creditors and the government on concluding the third review of the Greek program began yesterday, when the heads of the institutions’ missions returned to Athens and held a meeting with Alternate Finance Minister George Chouliarakis. This is the first round of the negotiations, which is expected to last until the end of the coming week. On the contrary, the issues of meeting the fiscal targets and a surplus of 3.5 percent of the GDP for 2018 remain open and will be discussed again on Thursday. At the same time, the disbursement of the remaining 800 million euros of aid to Greece by the European Stability Mechanism (ESM) should be considered as agreed.

According to sources close to the Greek Ministry of Finance, the first round of meetings between the government’s financial staff and the creditors’ representatives was held in good climate, with both sides agreeing that Greece will significantly exceed the target for the primary surplus for 2017. As stated by a Greek government official, the forecast is that the primary budget surplus will amount to more than 2.2 percent of the GDP this year, amount which is equivalent to 800 million euros.

The issue of the economic aid to vulnerable groups of the population promised by the government was not discussed during Monday’s negotiations, in contrast with the budgetary targets for the coming year. The same sources explain that there has been an “initial discussion” which is expected to be wrapped during the next meetings scheduled to be held by the end of this week. The two sides also agreed that Greece has achieved the target for lowering state arrears to the private sector from 1.5 billion euros between April and September to 1.25 billion euros between July and September. In any case, as noted by government officials, there is plenty of time until the budget is submitted to the Parliament at the end of November.

It should be noted that the disbursement of the remaining 800 million euros of aid to Greece is expected to take place between the end of this week, namely on October 26 when the board of ESM meets, and next week. Talks between the Greek government and the institutions will continue today focusing on issues relating to energy, growth and banking.

GCT Team

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