Fiscal issues to dominate review talks between creditors, Greek govt; latter wants to exploit next 4-year 'fiscal space'

Tuesday, 07 May 2019 13:43
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By T. Tsiros

Fiscal issues will dominate talks in Athens on Tuesday between representatives of Greece's European creditors and top Greek government ministers and officials, as auditors arrived in the Greek capital on Monday for the third post-bailout "enhanced supervision" review.

The latest review comes weeks before the Tsipras government must submit, to Parliament, the Medium-Term Fiscal Strategy (MTFS) for the 2019-2023 period. At the same time, the poll-trailing hard left government has repeatedly said it wants to implement tax breaks, and higher welfare spending, in order to "exhaust" a forecast "fiscal space" in the coming four-year period.

Having exceeded already high fiscal targets over the past three years - primarily annual primary budget surplus targets as a percentage of GDP, as mandated by creditors - the Tsipras government now appears highly interested in exploiting the extra revenue for political benefit.

Conversely, it remains to be seen whether European creditors and Eurozone partners will "sign off" on higher projects for the coming four-year period, as well as guarantees that the current or next Greek government will achieve the same results in terms of fiscal targets.

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