BoG Gov.: No fiscal space left in 2019 for more benefits

15 May 2019
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Bank of Greece (Gov) Yannis Stournaras sounded warning bells over the current Tsipras government pre-election measures, saying there is no “fiscal space” this year for further benefits beyond those foreseen in the currently executed 2019 budget.

The one-time finance minister, before 2015, again reinforced his reputation as a gadfly for the hard left government, this time a week after the abruptly announced measures by Greek Prime Minister Alexis Tsipras and two week before the European Parliament election.

In statements to the state-run news agency, Stournaras said resurgent nervousness on the part of sovereign bond investors regarding Greek debt is related to concerns over fiscal developments.

Stournaras said figures for the general government in the first quarter of 2019, released by the General Accounting Office, show that the Greek state will post a primary budget surplus of 3.5 percent. He quickly inserted a “however”, saying that if the trend continues over the rest of the year, then it will not exceed this figure.

“The nervousness that exists in the bond market over the past few days, to a certain degree reflects the concern on the part of investors regarding (Greece’s) fiscal developments”, he said.

In a curt response, Greek Finance Minister Euclid Tsakalotos called on Stournaras to “carefully review the economic indices to ascertain that the necessary fiscal space exists for benefits”.

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