Moscovici rules out primary surplus break

Moscovici rules out primary surplus break

European Commissioner for Finance Pierre Moscovici on Monday poured cold water on Athens’s hopes for lower primary surplus targets up to 2018, making it clear during his visit to Athens that everything (the bailout review, debt talks and International Monetary Fund participation) must be concluded by Christmas, and arguing that the inclusion of the IMF in the country’s third bailout is in everyone’s best interest.

The French commissioner was quite clear about the primary surplus issue, which the government sees as crucial: “I would propose that this discussion does not reopen,” Moscovici said in response to a question about the Commission’s position on cutting targets for 2019 and 2020. Referring to Finance Minister Euclid Tsakalotos, Moscovici noted that he “is very familiar with the framework of the program, including the fiscal targets.”

His comments came after meetings with Prime Minister Alexis Tsipras and the ministers of Finance, Economy and Labor. It appears the government has received the message, as Tsakalotos said that the level of the primary surplus targets is linked to measures for the debt and the IMF’s participation.

It appears, however, that the government will only accept this discussion being postponed until a later date. In this context, Tsakalotos said the adjusted midterm fiscal plan for 2017-2020 – which should have been tabled in May – remains under discussion. Ministry officials say the plan will be tabled when the government is ready. Athens will not be submitting the proposal in Parliament yet, as it wants lower targets for the primary surpluses of 2019 and 2020, on which the eurozone disagrees.

In the meetings with Moscovici, the government also addressed the issue of the program’s management. Tsakalotos argued that there is a contradiction when the creditors seek absolute control over the administration of the program down to the last detail, while urging the government to claim ownership of it. It is clear that Athens is seeking more freedom over the program’s execution without digressing from its targets. Tsakalotos said six or seven bills will be drafted in that direction – to which Moscovici is not opposed – after the summer.

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