Ministry sources: Greek primary budget surplus for 2016 now impossible to drop below goal of 0.5% of GDP

6 October 2016
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Sources at the Greek finance ministry cited various forecasts over the previous hours by the IMF regarding the Greek economy to deflect the possibility that a dreaded automatic spending cuts mechanism will be activated in 2017.

The mechanism, dubbed the “cutter” by the political opposition and the local press, was agreed to by the Tsipras government last May, in the face of then relentless pressure by Greece’s institutional creditors to legislate a framework by which spending cuts would be summarily implemented if primary budget surplus targets were missed.

Ιn a late-night media blitz, the same unnamed sources underlined that current figures regarding the primary budget surplus target for 2016, as a percentage of GDP, are already at such a high level that it is impossible to drop below 0.5 percent of GDP – which is the memorandum-mandated threshold for the current year.

The finance ministry’s leadership and its technocrats have also repeatedly pointed to standing differences between the IMF and European creditors over the Greek program, with the former demanding debt relief in order to remain as a creditor.

Figures for the 2016 primary budget surplus will be officially released in May 2017 .

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