BUSINESS

Urgency for midterm fiscal plan submission within 2016

SOTIRIS NIKAS

TAGS: Finance

The Finance Ministry fears the 2019 target for a primary surplus of 3.5 percent of gross domestic product will become irrevocable if negotiations on the midterm fiscal plan are not completed by the end of the year.

Unless the government votes the new midterm plan for 2017-20 through Parliament by the end of December, the plan to be submitted after January 1 will include binding limits on expenditure, meaning that Athens will be unable to reduce the target as it currently wants to.

Midterm fiscal plans may have an effect of four years but the government is only committed to the expenditure limits set out in them for the first couple of years after the submission of the plan. If the plan is tabled in 2017, it will have to concern the years from 2018 to 2021.

Athens does not dispute the targets set for 2017 (1.75 percent of GDP) and 2018 (3.5 percent), but the eurozone insists that 3.5 percent should remain the target for several more years.
 

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