Greek government sources have underlined that “there are no additional commitments” in the Finance Ministry’s letter to the ESM, adding that Finance Minister Euclid Tsakalotos‘ letter confirms existing commitments.
The same sources noted that if targets are exceeded in the future, the surplus can be used, in accordance with the institutions, on targeted measures, offering relief from the tax burden and creating a cash buffer for the payment of overdue debt.
An article from the Ta Nea however reports that the Finance Minister has confirmed in his letter to the ESM that if the 0.5% GDP primary surplus target is not achieved for 2016, then pension cuts will have to come into effect (as opposed to cutting government expenses). Government sources estimate that his is highly unlikely, given that a 7.5 billion euro primary surplus was recorded in the 11-month period between January and November.
According to the newspaper article, the government will also have to reach an agreement with the institutions, before utilizing any excess of the primary surplus. The government’s initiative to distribute part of the excess of the primary surplus prompted reactions from Greece’s European partners and creditors.
