Eurozone central banks’ profits from Greek bond holdings (SMPs and ANFAs) could be used for productive investments in Greece, a senior eurozone official said on Friday, opening the way for boosting the Public Investments Program to the tune of 1.2-1.3 billion euros per year.
Nevertheless, sources say there are still a number of difficulties and gray areas regarding the application of that option in practice, and its significance in the indirect reduction of the primary surplus target and the creation of additional fiscal space that would allow the government to implement tax cuts.
According to the official who spoke to reporters in Brussels following Thursday’s Euro Working Group meeting and ahead of the informal Eurogroup in Helsinki next Friday, “the issue of primary surpluses cannot be raised, as this is a particularly sensitive matter. The government must now present and implement its program.” He went on to add that the issue of primary surpluses was not raised on Thursday by Greece’s new representative at the EWG, Michalis Argyrou.
The possibility of using SMPs and ANFAs for investments is provided for by the statement of the June 22, 2019 Eurogroup meeting, but it remains to be seen what the “agreed investments” actually are.