FinMin Staikouras: Gov’t to ask creditors for lower primary surplus targets within 2020

Greece will be able to ask its creditors to lower the primary surplus targets and plans to do so in 2020, Finance Minister Christos Staikouras said in a debate on the 2020 state budget in Parliament late on Saturday.

“To reduce primary surpluses, the debt’s sustainability has to improve,” he said. “We plan to raise the issue within 2020, based on four arguments: higher economic expansion rates, lower borrowing cost, early payment of the IMF debt – already done – and use of ANFAs and SMPs, the European bank returns from holding on to Greek bonds,” he said, referring to the early repayment of the higher-interest part of the IMF loan. These four factors “improve the public debt’s sustainability significantly, especially
its denominator, so we can safely demand lower primary surpluses,” he stressed.

Responding to criticism by the opposition parties that the government’s outlook for GDP and growth rates are optimistic, Staikouras said that the government’s forecasts have been on target. “You are citing data from the institutions and agencies – therefore, you accept them. Therefore, you accept that 2020 will be better than 2019,” he pointed out.

On the criticism that the 2020 budget foresees a rise in tax revenues, the Finance Minister said there will be no additional taxation, but a broadening of the taxation base to account for this. Responding also to the criticism by opposition parties that “the government helps few businesses, which are profitable,” Staikouras called on main opposition SYRIZA to rethink its argument, as it’s “shooting itself in the foot,” as he put it. “It’s like saying that it (Syriza) left behind few profitable businesses; thus, it accepts it has overtaxed households and businesses.”

Staikouras also cited comparisons of the average taxation on legal entities, which rose from 13,244 euros in 2014 to 16,457 euros in 2017. “For those in the main opposition who wail over the great wealth, during 2014-2017 the legal entitities registering profits of over 7.5 million euros rose by 41.77 pct, and SMEs with profits up to 1.2 million euros dropped by 1,998,” Staikouras said.