Tsakalotos to Reuters: Long-term fiscal targets ‘may need to be reviewed’; Greece can now finance itself from markets

5 July 2018
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Greek Finance Minister Euclid Tsakalotos was quoted by Reuters on Wednesday as saying that long-term fiscal targets that his government has agreed to – especially an annual 2.2-percent primary budget surplus as a percentage of GDP between 2023 until far-off 2060 – may need to be “reviewed”.

At the same time, the formerly UK-based economics professor said the country now has the ability to finance itself via the markets, after Eurozone creditors extended debt relief last month, along with the post-bailout framework for its supervision.

The Reuters article, entitled “Greece has means to make debt relief deal work – finance minister”, reads:

“As he prepares for meetings with investors in New York and Boston in coming days and in Asia in September, Euclid Tsakalotos said Greece had honoured its promises to creditors.

The deal that euro zone finance ministers agreed in June to smooth next month’s exit from its third bailout offered clarity and reassurance to investors in Greece. That applied “whether we are talking about a 10-year government bond or whether we talk about foreign direct investment,” he told Reuters.

Tsakalotos took over in 2015 pledging to implement Greece’s third rescue package since 2010. His euro zone counterparts agreed last month to extend maturities and defer interest payments on 96 billion euros worth of Greek debt, about one third of the country’s overall debt pile.

Greece has the highest debt-to-GDP ratio in the euro zone, at almost 180 percent of its national output.

“I had told them (potential investors) that all pieces of the puzzle would all come together … and they did,” Tsakalotos said, referring to a previous trip to the United States.

“(This time)… I just want to go through with them their views, my views, on why we should be much more confident on Greece after the 21st of August when we leave the programme.”

Asked if Greece would need further debt relief to sustain market access and to be able to service its debt in the long run, as the International Monetary Fund suggested in a report last week, Tsakalotos said that a 2017 promise by European lenders to do more if needed was a further safety net.

“As things stand now and if we have serious government policy from now on, which has sustainable growth and does treat our growth strategy seriously… then I think everything is in place for sustainability,” he said.

He said the government’s goal was to tackle the debt burden through reforms and sustained higher growth as well as relief measures.”

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