The need for Greece to focus on reforms, prudent fiscal policy and debt sustainability, he stressed today, from his podium 7th Delphi Economic Forumthe head of the European Stability Mechanism, Klaus Reglingwhile expressing the assessment that the Greek debt structure is good and that its viability is pursued by the government in an appropriate manner.
“THE war in Ukraine means that growth in Greece, Europe and the world will slow down and inflation will rise. This also has an impact on the debt of course. Fortunately, Greece did very well last year and almost everything that was lost in 2020 has been recovered (…) The reforms must continue, the government to be careful in its fiscal policy and the debt to remain sustainable “, Mr. Regling underlined, during a discussion with the journalist Fivos Karzis.
Regarding the primary surplus, he pointed out that Greece is on the right path to achieve it in 2023. The return to the primary surplus is, as he said, one of the necessary steps to keep the debt sustainable and, based on the talks that recently had in Athens, “this is (the Greek government) plan for 2023” and is pursued in the appropriate way.
Regarding the Greek debt, he pointed out that its structure is good: “The average maturity of the Greek debt is 20 years and the interest rates are also extremely low, about 1.5%. This is a good “insurance policy” for Greece. “I believe that this relationship (of debt to GDP) may decrease further in the coming years, but the government must always be very careful about fiscal policy and reforms,” ​​he said.
Mr. Regling also estimated that, as a result of the war in Ukraine, growth will be lower this year across Europe, but noted that he does not expect it to be negative: “I do not expect negative growth for Europe as a whole this year, because we have “a very significant ‘carryover’ from last year,” he said, adding that the development momentum of exiting the pandemic was very strong before the war broke out.
Patelis: “Reform appetite is not affected by the time of the elections”
The assessment that “the appetite for reforms is not affected by the time of the elections” was expressed by the head of the financial office of the Prime Minister, Alexis Patelis, pointing out that the achievement of an investment level in 2023 – which requires a lower debt-to-GDP ratio , reforms and single-digit percentage of red loans – remains a goal of the government.
He added that since the beginning of its term, the government has brought to Parliament more than 250 bills for reforms and added that its immediate legislative work includes – among others – the reform of primary health care, the clawback, the digital OAED, the skills system and re-skilling and simplification of licensing of Renewable Energy Sources.
“The energy and inflation shock is a point where the country will be tested and our goal is to do the best we can, because the shocks will always be there, the difference is the way you will manage them,” said Mr. Patelis .
“Debt / GDP ratio may fall below or around 150% by 2026”
Optimistic that Greece’s debt, which last year is estimated at 193% of GDP, may decline by 10% in 2022, with the prospect of “falling below or around 150%” by 2026, appeared its Secretary General of Fiscal Policy Ministry of Finance, Athanasios Petralias, while he also expressed his optimism for the primary surplus in 2023: “Of course everything will depend on the evolution of the energy crisis, but assuming that we will gradually return to normal by the middle of next year, we are optimistic about the primary surplus. At the end of April we will submit the stability program, there will be a surplus well above zero and specifically a little lower or around 1% “he noted.
The former Deputy Minister of Finance (2015-2019), George Chouliarakis, noted in the same discussion that “the quality of the Greek debt allows us to plan in the long run, interest rates are in favor of Greece, we should not proceed aggressively in growth.” He also argued that incentives and policies were not as targeted as they could be and that time was wasted on legislation that did not help development.
The Special Secretary for Private Debt Management, Marialena AthanasopoulouFinally, he referred to the new solvency framework and the tools it provides to borrowers to settle their debts. As he said, there is an interconnection of the database of all creditors, an algorithm provides viable solutions and 460 business restructurings have already been carried out.
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