Regling urges Greece to maintain goal for 3.5% GDP primary surplus

21 June 2016
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The President of the European Stability Mechanism (ESM) Klaus Regling underlined the importance of Greek authorities maintaining the target for a primary surplus worth 3.5 % of the GDP. Mr. Regling made the statements after his meeting with the Minister of Finance Euclid Tsakalotos, which took place after his meeting with the Governor of the Bank of Greece Yannis Stournaras.

On his behalf, the Greek Minister appeared confident that the Eurogroup will be in the position to provide solution, however he commented that these solutions usually come at the last moment. Mr. Tsakalotos also explained that there are two ‘parallel’ processes at play, one focused on the issue of debt relief and the other on the implementation of prior actions.

According to the ESM chief, the agreement reached between Greece and its European creditors demand the 3.5% target, which he intends to honor. Asked about the possibility of reducing the goal to 2% or 1.5% (as requested by the IMF), Mr. Regling added that the agreement for a 3.5% target does not include a time frame, but will be for at least one year.

In relation to debt relief, Mr. Regling explained that there are different approaches by Europe and the IMF over the prospects of the Greek economy, but avoided further speculating or elaborating on the differences. Mr. Regling stated that while he does not want to say that the IMF is in the wrong, he estimated that the European admissions and predictions were more realistic.

Finally, the ESM chief told journalists that the first tranche of 7.5 billion euros will be paid out to Greece on Tuesday, with 1.8 billion euros going towards outstanding debts of the Greek state towards the private sector.

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