Thursday, May 16, 2019

Greek central bank fires warning over risk of missed budget target

by Kerin Hope

Financial Times

May 16, 2019

Greece’s central bank governor has warned that a package of pre-electoral handouts due to take effect next week could derail the country’s budget target agreed with its bailout creditors.

Yannis Stournaras’s warning came as parliament on Wednesday approved hastily prepared measures that the leftwing Syriza government hopes will boost its popularity ahead of EU parliament elections on May 26.

The package of cuts in value added tax and a pension bonus would cost around €1bn, according to the finance ministry.

Speaking to the Financial Times on Thursday, Mr Stournaras said first-quarter budget figures indicated that the primary surplus — which excludes debt service costs — declined by 0.5 per cent of gross domestic product compared with the same period in 2018. He forecast the trend would continue as tax collection slowed ahead of a general election due in October.

“There is no fiscal space for handouts,” Mr Stournaras said. “The government is unlikely to collect taxes at the same pace as last year, while it will have to address this year a large body of further pension claims covering the crisis period.”


Saturday, May 11, 2019

Greek government wins confidence vote

by Kerin Hope

Financial Times

May 11, 2019

Greece’s minority leftwing Syriza government narrowly won a parliamentary vote of confidence on Friday night after three days of heated debate over economic policy and prime minister Alexis Tsipras’ record during four years in power.

Mr Tsipras called the confidence vote after Kyriakos Mitsotakis, the opposition leader, proposed that MPs should censure the deputy health minister for criticising a disabled psychiatrist running in next week’s elections for the European Parliament with his centre-right New Democracy party.

Syriza captured 153 votes in the 300-member parliament thanks to support from a group of rightwing and independent lawmakers who have backed the government since the collapse in March of its coalition with Independent Greeks (Anel), a small nationalist party.