The moves seen earning Athens some fiscal space
The government is banking on a combination of seven moves, and possibly an eighth, to secure the necessary fiscal space for its 2020 tax breaks, while also cultivating a climate of trust with the country’s creditors so that they view Athens’ arguments in a positive light.
The creditors’ mission chiefs appeared provisionally convinced there will be no budget shortfall for this year after meeting with Finance Minister Christos Staikouras and other government officials the week after the election. They did, however, maintain their reservations for next year, and everything will be on the table during their next visit to Athens in September, when the government intends to present seven moves plus one to extend its fiscal leeway.
The interventions being considered for next year are reducing the budget expenditure to more realistic levels, a spending review across the state mechanism to save 400 million euros, tighter budgets for state corporations, electronic governance and the utilization of unused real estate assets, a ratio of five departures for each state hiring, the acceleration of growth, and the adjustment to the 120-tranche debt repayment arrangement.
Sources say the government’s additional idea concerns the inclusion of eurozone central banks’ earnings from Greek bond holdings (SMPs and ANFAs) in the annual budget revenues calculated for the primary surplus.