New Europe: Greece over-performs, Schäuble endorses, IMF doubts

By Irene Kostaki/

The Hellenic Statistic Authority (ELSTAT) is set to demonstrate Greece’s 2016 primary surplus over-performance, while the International Monetary Fund (IMF) remains skeptical on the long run.

As the target set at 0.5% was met and Greece is expected to demonstrate a primary surplus of 4% GDP for last year, but still, the IMF is having a hard time being convinced that this performance could be somewhat sustainable until 2018 – when Greece’s third bailout program ends – and beyond.

Spring forecasts on the wait

European Commission’s Spring forecast for 2017, is expected to be published on 11 May by EU’s statistical agency Eurostat.

According to what the IMF has made clear, Greece’s performance was mainly a result of one-off measures, so this surplus should not be expected to last, according to what IMF’s head, Christine Lagarde believes.

“If Greek debts are not sustainable based on IMF rules and reasonable parameters, we will not take part in the program,” said Lagarde recently, warning Greece over unsustainable debt.

German Finance Minister Wolfgang Schäuble said from Washington’s IMF Spring Meetings that the Greek program is functional and that Greece’s forecasts have proven to be better than IMF’s pessimistic take.

“I think that economists should sometimes face reality,” said Schäuble on Thursday, adding that even the implementation of 50% of the measures agreed is possible.

In line with the above, Schauble expressed the opinion that the European Stability Mechanism (ESM) could even in shortchanged term, turn to an IMF for the Eurozone.

Source: New Europe