01 May 2014

EC: Greece's debt dynamics have slightly worsened

Following what Greek Prime Minister Antonis Samaras coins as the 'success story' - Greece recovering from its financial crisis - the European Commission released a report on Friday which said Greece's debt dynamics have slightly worsened.

"This deterioration is due to several factors: a lower forecast for nominal GDP, mainly reflecting a deeper adjustment in prices, a somewhat lower forecast for privatisation revenue following delays in privatising government assets and higher arrears clearance compared to the previous revue", the report said.

As Reuters reported, the country faces a funding gap of €5.5 billion through to end-May 2015. Also, the Commission's debt forecasts for 2020 and 2022 are based on the assumption of further debt relief for Athens.

Reuters reported on Wednesday that the Samars led government will formally propose stretching the maturity of its international rescue loans from about 30 years to up to 50 as part of a push to make its debt sustainable.

On a more positive note ekathimerini reported that Greece is expected to beat a 2014 budget target set by its international lenders and may tap bond markets again with an issue of between €3 and 6 billion to plug any potential funding gap over the next 12 months.

Athens sees a primary budget surplus of 2.3 per cent of GDP this year, exceeding a target of 1.5 per cent of GDP set by the EU and IMF, Deputy Finance Minister Christos Staikouras said.

As a result of the 'stabilisation of the Greek of Greece's public finance' ekathimerini reported that Samaras will propose sweeping reforms affecting how government and parliament operate. The reforms are expected to include lowering the number of lawmakers from three hundred to two hundred. 

Meanwhile with European elections on the horizon extremist and protest parties have been busy campaigning. EnetEnglish highlighted the concern felt when two retired Greek army generals announced they will run for the far right Golden Dawn party in next month's European Parliament elections, in a move that raising concerns about the intrusion of ultra-right ideology in the armed forces.

Other parties intending to run in the EU elections include a Turkish nationalist party from Thrace which says it represents the Western Thrace Turkish minority.

EnetEnglish also reported that the list also features newcomer Potami (River), led by Stavros Theodorakis, as well as an entry from perennial candidate Miltiadis Tzalazidis, under the 37-word title of Renewing Independent Left, Renewing Right, Renewing Pasok, Renewing New Democracy, No to War, Business Party, I Give Away Land, I Pardon Debts, I Save Lives, I Save the Wealth of the Greeks, Panagrarian Labour Movement of Greece (PAEKE). 

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