CNBC: Greece tests creditors, markets with 2019 spending plans

2 October 2018
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CNBC on Monday warned of “another fight” between the current Greek coalition government with its creditors and markets, in a dispatch from Athens coinciding with the submission of the 2019 budget in Parliament and two separate “scenarios” included: implementing already legislated pension cuts and not implementing them.

According to CNBC, the “… center-right and opposition party New Democracy has been leading opinion polls against the ruling anti-establishment party Syriza. In the latest poll, conducted on behalf of the Proto Thema newspaper, showed last month a 10.9 percent difference between the two parties.

“The Greek government is under huge pressure to allow for some fiscal easing as it tries to catch up in polls before the elections in 2019,” Ricardo Garcia, chief euro zone economist at UBS, told CNBC via email Monday.

“In addition, New Democracy is increasing pressure in advance of the elections by promising fiscal easing themselves. If Syriza isn’t able to deliver fiscal easing before the elections, New Democracy’s promises will look more credible,” CNBC quoted Garcia as saying.

“Backsliding with reforms could also unsettle financial markets at a time when Greece is still vulnerable to shocks that are outside its control, however.

The news site reminds that Greece’s borrowing costs rose on the back on ongoing concerns regarding Italy, not Greece.

The Greek government is forecasting a lower public debt in 2019, from 183 percent of GDP this year to 170.2 percent next year.

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