Government to table programme in Parliament, Regling lays down the law

By George Gilson

Just four days before Prime Minister Kyriakos Mitsotakis will present his government's programme in Parliament on 20 July in order to receive the constitutionally mandated vote of confidence in Parliament, he met in Athens with European Stability Mechanism (ESM) chief Klaus Regling, who will play the decisive role in determining how and when the incoming government's promise of lowering both taxes and the primary surplus targets in order to achieve growth can be implemented.

After the meeting, Mitsotakis made it perfectly clear in a public statement that his governmeny fully intends to meet fiscal targets agreed to with creditors.

The readout from the PM's office stated that, "The Prime Minister underlined the importance of reforms that will bolster economic growth and job creation, and which are the central pledges of the newly-elected Greek government."

Meeting primary surplus target above all
The main target for the time being is a 3.5 percent of GDP annual primary surplus, which Mitsotakis pledged that his government will try to lower by rapidly achieving higher growth rates, effectively ensuring that creditors will get their money back.

As Regling noted, the EFSF and the ESM combined have lent Greece a whopping 205bn euros (of a total of 290bn euros in aid that Greece has received during the crisis).

"On top of that there is extensive debt relief," he stressed.

For its part, the PM's office expressed the conviction that "rapid implementation of structural reforms will open the path to stronger growth and greater fiscal space".

It is that additional fiscal space that the government needs in order to proceed with implementation of its pledged tax cuts.

Regling...