Mission chiefs express reservations on 2020 budget at EWG

At Thursday’s Euro Working Group the creditors’ mission chiefs reported that their visit to Athens this week had taken place amid a positive climate. However, they also expressed reservations regarding the achievement of the target for a primary surplus of 3.5 percent of gross domestic product next year.

At the meeting in Brussels the creditors’ representatives said that, right now, a fiscal gap of 0.55 percent of GDP (about 1 billion euros) is projected for 2020, but that it is not clear whether this will in fact turn out to be the case as tax revenues may improve and growth may accelerate. “The fiscal picture remains unclear,” they reported.

They went on to present a picture of progress on the reforms front, but they also noted various delays and outstanding issues that have to be settled soon: By November, when the fourth post-bailout assessment is completed, the Greek government will have to show progress mainly on credit sector reforms, and especially in reducing bad loans.

The creditors’ representatives also referred to the need for state debt repayment to suppliers and taxpayers to be accelerated, with the next important deadline being October 15, when Athens will submit its 2020 draft budget to the European Commission, just like every other eurozone government.