The Greek government is reportedly working on a medium term economic program for the 2017-2020 period that features a compromise in terms of a primary budget surplus target after 2018, ostensibly between a 2-percent target that satisfies Athens, and a 3.5-percent goal mandated by the third memorandum in 2018.
The 3.5-percent figure for a primary budget surplus in 2018 is currently “on the books”, although the leftist Greek government, most of the mainstream political opposition and the country’s central banker have pressed for a reduced target after the third memorandum (bailout) ends in 2018.
Higher primary budget surplus targets are heavily favored by the EU Commission and SSM, whereas the IMF – one of four creditors comprising the “quartet” – has decried the figures as wholly unrealistic for the recession-plagued Greek economy.
The compromise reportedly being calculated by the government’s top economic team revolves mostly around political and negotiating terms, rather than strictly economic conditions.
Submission of the mid-term program is already delayed, as it should have been tabled in Parliament over the summer, replete with forecasts for the Greek economy extending to 2020, two years beyond the end of the third bailout program and “light years” away in terms of any given Greek government’s political longevity in the “crisis era”.
Specifically, forecasts for a primary budget surplus after 2018 caused most of the delay.
Attempts by the Greek government over the summer, during contacts with various European officials, to reach an agreement over reduced primary budget surplus targets – as a percentage of GDP – after 2018 proved fruitless.
Recent statements by SSM head Klaus Regling and EU Commission Pierre Moscovici also apparently show that the standing Greek request – promoted by the leftist government and also eagerly backed by the center-right main opposition and the IMF – has not made headway.
