Staikouras meets Regling, asks that migration, coronavirus spending be exempt from primary surplus

Meeting European Stability Mechanism (ESM) Managing Director Klaus Regling in Athens on Monday, Finance Minister Christos Staikouras discussed the measures that need to be taken to address the economic repercussions from the spread of coronavirus globally and asked that certain categories of spending be exempted from calculations of Greece’s primary surplus.

In statements after their meeting at the finance ministry, Staikouras said that, in terms of the repercussions of coronavirus, the data and latest extimates indicate that their impact on the European and global economy, while temporary, will be more significant and painful that initially estimated.

In light of this, the minister said, the situation should be re-evaluated at the Eurogroup meeting next week and specific initiatives adopted to deal the negative repercussions of the virus’ spread on growth and public finances. These initiatives should aim to prevent the virus spreading and to support health systems, as well as boosting liquidity and protecting employment. He also noted that the above measures should be exempted from the existing framework in terms of their fiscal impact, in line with the flexibility envisioned in such emergency situations under European rules.

On migration, Staikouras underlined that the country is protecting the most difficult borders in Europe, noting that Greece has recently been faced with an organised and assymetrical threat against its national security, which the country was protecting – as was its right and obligation – with determination and self confidence. The minister asked for practical recognition of this fact by Greece’s European partners and said that Athens is seeking the exemption from the state budget of specific funds used to manage mass migration pressures at its eastern land and sea borders, so they are not taken into account when calculating in its fiscal balance.

“We will continue to meet the country’s obligations but we are asking for the necessary fiscal space to implement growth- friendly policies, in order to lower taxes for households and businesses, which will help in achieving high and sustainable growth,” Staikouras said.

According to the minister, he repeated this demand in the meeting with Klaus Regling, presenting specific quantitative figures that make the creation of this greater fiscal space both possible and beneficial. These figures are included in the finance ministry’s Debt Sustainability Analysis (DSA) report.