ESM Chief Puts Greece’s Hopes on Low Primary Surpluses on Hold

4 September 2016
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European Stability Mechanism President Klaus Regling sent a clear message to Greece that it should not expect lower primary surplus targets than those set by creditors.

Athens has been trying to convince its lenders that the targeted 3.5% primary surplus for 2018 is too high and it would affect crisis-stricken Greeks.

“The agreement does not change,” said the ESM chief in an interview with a Greek newspaper . “The target of 3.5% has been agreed by the Prime Minister in July (2015). The agreement is very clear. I see there is no tendency (among creditors) to give up this deal and I do not believe that it is in Greece’s interest to challenge last year’s agreement,” Regling said.

Regarding measures for Greece’s debt relief, Regling said that even though the International Monetary Fund would like to see action taken now, “there is good reason to do it later, because then we can be more certain about the real needs of Greece.”

On the bailout program reforms, Regling said that it is annoying that some ministers dispute the privatization program, commenting that this shows that not all government members take full ownership of the program. At least, he said, the negative comments on privatizations do not come from the finance minister or the prime minister.

The ESM head stressed that Greece will not need a new bailout program, provided that the government will fully implement the existing one. He added that by the end of the program, the country should be able to borrow from the markets because it will no longer be financed by its European partners.

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