Decision on SMPs and ANFAs put off to 2020

Decision on SMPs and ANFAs put off to 2020

Thursday’s Eurogroup in Brussels will not have any specifically Greek issues on its agenda, as the matter that Greece is interested in – i.e. its use of eurozone central banks’ profits from Greek bond holdings (SMPs and ANFAs) – has been postponed until 2020, a eurozone official said.

The same official revealed that the decision on the disbursement of the next tranche of SMPs and ANFAs to Greece, amounting to some 650 million euros, will be made at next month’s Eurogroup, when the progress of the country’s reforms based on the September visit to Athens by the mission chiefs is to be assessed.

Speaking to reporters on Tuesday, the official went on to explain that the possibility of the government using these funds for investment, thereby generating more fiscal space, will likely be discussed next year, as there may be the option of using these profits for state investments instead of paying off the national debt (as has been the case to date), but it is important to decide whether the fiscal space will be expanded this way.

Crucially, this note does not alter the fundamentals of the 2020 state budget, as this has been drafted with all the tax cuts without relying on any additional fiscal leeway to stem from the SMPs and ANFAs. If that does come up, it will be an additional boost for 2020.

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