Surplus targets of 3.5 pct cannot continue ‘forever,’ Moscovici says

Greece cannot be expected to achieve primary surpluses of 3.5 percent “forever,” European Commissioner for Economic and Financial Affairs Pierre Moscovici said on Thursday, during the presentation of the European Commission's autumn economic forecasts.

The French commissioner cited growth rates projected for Greece of 1.8 percent in 2019 and 2.3 percent 2020, noting that they are backed by a “growth-friendly fiscal package” and an increase in exports.

He also referred to a drop in unemployment to 14 percent in 2021, stressing that, while still high, it will have fallen to half the level it had reached during the crisis. He also welcomed the projected debt reduction from 175.2 percent in 2019 to 169.3 percent in 2020, thanks to primary surpluses.

Responding to a question about whether these figures pave the way for a reduction in Greece’s primary surplus targets, Moscovici reiterated that his position, and that of the Juncker Committee, is that this would require “credibility” and that “commitments are respected.”

However, he stressed, compelling Greece to achieve primary surpluses of 3.5 percent is not something that can “be continued forever,” adding that this would have to be discussed when the time was right.

Moscovici stressed the importance of credibility in order to start negotiations with the creditors, adding that this is an issue that will have to be addressed by the next Commission. [ANA-MPA]