Greece says wants wriggle room on debt management

ATHENS (AFP) – Greek Prime Minister Kyriakos Mitsotakis yesterday said his country, recovering from a decade-long debt crisis, wanted more freedom to manage its annual primary surplus.

“If we overperform in one year, let it count towards the next year,” Mitsotakis said at the Davos economic forum.

“We don’t have a smoothing mechanism for our primary surplus. So if we deliver a bigger primary surplus, as we will in 2019, there’s no way for me to carry it over to the next year.”

“It doesn’t make any sense whatsoever. Then my incentive is to spend it at the end of the year. That’s not serious fiscal policy,” Mitsotakis said.

Under the terms of its final bailout, negotiated by the previous leftist government, Greece must produce a primary budget surplus of 3.5 per cent of GDP until 2022 and of 2.2 per cent of GDP on average to 2060.

Primary budget surpluses exclude government debt interest payments. In its latest budget, Athens forecasts a primary surplus of just over 3.5 per cent of GDP in 2020.

Elected in July on a ticket of tax cuts and growth, the conservative Mitsotakis has vowed to renegotiate the 3.5 per cent target.