The next government will need to make very cautious moves if it wants to alter the terms of last Friday’s Eurogroup agreement toward fiscal relaxation, an E-Kyklos event on the political consequences of the agreement heard on Thursday.
Former deputy prime minister Evangelos Venizelos, who leads the E-Kyklos think tank, warned that in the context of the crisis period Europe is going through, the next government will only be able to negotiate on the condition that it would serve as a “game changer” for the political and economic climate. That way, the next administration will be able to argue it is changing the denominator of the debt-to-gross domestic product ratio and seek a change on the debt side from the country’s creditors.
It should also head more toward changing the mix of the so-called countermeasures, to have a greater impact on growth. In this context, said Venizelos, the first measure that should be taken should not concern the reduction of taxes but easing social security contributions.
The next government “should be cautious on how it raises the issues and proceed step by step,” he added, while blasting the rejection of the credit line only to accept a stricter surveillance mode.