Poul Thomsen: Greece’s current reforms cannot deliver primary surplus targets exceeding 1.5 pct of GDP

Greece’s current reforms under the third bailout programme cannot deliver primary surplus targets exceeding 1.5 pct of GDP, the director of the International Monetary Fund (IMF) European Department, Poul Thomsen, said in a news briefing in Washington on Friday.

“We can support a programme that is based on a primary surplus of 1.5 percent. If Greece and its European partners want to agree on a programme with a more ambitious fiscal target, we need to see how it adds up,” he said, repeating the standing IMF position on the issue.

Greece has yet to implement important reforms in the public sector, Thomsen pointed out, while he also noted the high deficits generated by the Greek pension system and problems with exceptionally large tax exemptions of households, reaching as high as 60 pct.

“It urgently needs a better social system to target the vulnerable, it needs an unemployment compensation system in order to be able to modernise,” he said.

Thomsen repeated that Greece’s debt is not sustainable, which prevents the IMF from participating financially in the Greek programme.