Athens asks for a reduced fiscal target


At Monday’s Eurogroup meeting, the Greek government will push for the greatest flexibility possible, as strict adherence to the post-bailout agreement for primary budget surpluses of 3.5 percent of gross domestic product now seems irrational in the context of the coronavirus pandemic.

The virus will carry a fiscal cost on two fronts: expenditure and revenues. Spending is already on the rise, as Finance Minister Christos Staikouras announced last Friday the supply of at least 200 million euros on top of what the budget provides for to boost healthcare. The cost of supporting employees at businesses hurt by the restrictive measures will also be high, as the originally limited list of enterprises forced to close their doors has now been expanded.

On the revenues side, the budget will suffer from the slump in economic activity and the suspension of tax and social security payments that will expand this week to all sectors hit by the coronavirus.

Therefore Greece will request that the primary surplus target be brought down to 2.5 percent at the most.