Centeno says Greek pension cuts a ‘fiscal,’ not ‘structural’ measure

Eurogroup head Mario Centeno reiterated on Monday that Athens must continue to implement its commitments to its creditors but noted that the pension cuts debated with the government are considered a fiscal rather than a structural measure – an argument supported by the Greek government.

This clarification, made by Centeno at the end of the Eurogroup meeting in Luxembourg, means that the measure could eventually be scrapped.

Greece's Finance Ministry submitted earlier on Monday the 2019 draft budget to Parliament, which includes two different scenarios on the country's fiscal forecasts, depending on whether the agreed pension cuts will be implemented next year.

Based on the draft, the country's primary budget surplus target will reach 3.56 percent of GDP if the pension cuts are not implemented and 4.14 percent if they are.

Commenting on the two pension scenarios at the Eurogroup press conference, the head of the European Stability Mechanism Klaus Regling said it is a “positive” move.

"Given that they [the Greek government] had to present something today, it was good to have the two possibilities, and leave it to the ongoing discussions with the Institutions what the final outcome will be," he added.

The government is trying to convince its creditors the reform is unnecessary, pointing to the country's overperformance in its primary surplus target, but Athens is also keen to show that it is not backsliding on agreed measures.