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The criticism of the Greek delegate focuses mainly on the issue of long-term debt sustainability, but also on the Fund's insistence on maintaining certain reforms such as the minimum wage and collective labor contracts [19659002] The Greek authorities welcome the fact that macroeconomic imbalances have been largely eliminated and that many reforms have taken place. However, the report underestimates the impact of several fiscal and structural reforms, focusing more on delays, weaknesses and what has not been implemented, rather than on the economic potential of 450 legislative actions and implemented in the last three years, the return to macroeconomic and fiscal stability ", the position of the Greek states delegates.
In addition, Mr Psalidopoulos refers to the important fiscal adjustment by putting emphasis on the country's ability to produce high primary surpluses.It is recalled that the issue of primary surpluses and GDP growth are the evidence on which the IMF supports its doubts about the long-term viability of Greek debt
. "Greece has exceeded its main fiscal targets with a wide margin. three consecutive years, indicating the ability of the economy to produce sustainable primary surpluses. The authorities call on the IMF to recognize the important fiscal effort and the ability of the economy to generate significant surpluses in the favorable environment of the EU Stability and Growth Pact, which sets targets for the fiscal policy and the commitments of euro area countries … Without structural fiscal measures starting in 2017 and with GDP growth results lower than IMF forecasts, the authorities welcome the primary revision of the Fund for the 3.5% for the period 2018-2022, indicating that the previous budget projections of the Fund were significantly more pessimistic, with a margin of at least 2% of GDP in structural terms, "noted Mr. Psalidopoulos in his statement
On the reform side, the delegate of Greece underlined the extent of the reform efforts that had been made in recent years. the report because it does not consider it "balanced", arguing that it focuses too much on specific issues and that it therefore ignores the big picture of the reform work that has been accomplished. Some of the examples he mentions relate to Sunday's trade and the pace of privatization, according to him, the report focuses particularly on criticism and does not report progress in related areas of activity economic
. the report will benefit from a more balanced tone of achievements and the likely impact of these reforms on long-term growth. Instead of highlighting what has been done and badyzing the impact of the reforms implemented, the report presents a too negative picture of the implementation of reforms, highlighting the delays without giving credit to the achievements. … The authorities regret the fact that the report does not fully recognize the progress made and reflects the impact of the broader reforms on the long-term growth potential of the economy, "says Psalidopoulos in his declaration.
In this context, Michalis Psalidopoulos expresses Greece's strong opposition to the maintenance of the minimum wage and to collective bargaining measures because, as he maintains, their revision does not constitute a violation of Greece's obligations. because it was agreed from the outset
"The authorities are aware of the IMF's views on collective bargaining and the minimum wage, but can not be reinstated with the access ord of all authorities. The authorities recall that the principles of extension and favorable treatment were temporarily suspended in 2012 with a time horizon of rehabilitation. In addition, during the third review of the ESM program, an independent team of experts was set up with the consent of all interlocutors to evaluate these principles. The experts voted in favor of restoring the two principles: unanimously in favor of lifting the suspension of the principle of extension and majority in favor of lifting the suspension of the principle of treatment favorable. As these arrangements were temporarily suspended with a specific date of reinstatement, the authorities did not agree with the idea that reintroduction is a reversal of policy, "says Mr. Psalidopoulos
IMF: Uncertain long-term prospects
Earlier, intensify efforts to reduce red lending to strengthen bank balance sheets, full implementation of pre-approved measures, namely the reduction of pensions and the reduction of Customs, maintaining the current (19659002) The IMF estimates that no new tax measure is required by the International Monetary Fund (IMF) because the International Monetary Fund (IMF) is only able to do so. expects that it is inadequate for the Greek economy. Greece, but a change in the "mix" of fiscal policy to stimulate growth and solve serious social problems. In this context, the IMF is asking the government not to revisit the issue of pension cuts and allocate the resources that will be saved to increase public investment but also to pay targeted social benefits. He also insists that a reduction in tariff rates is a necessary measure to broaden the tax base in order to finance tax rate reductions.
The IMF uses the term "uncertain" to describe long-term debt service prospects. In the medium term, debt consolidation measures agreed with Europeans are expected to strengthen debt sustainability and facilitate the exit of Greece from the markets
The IMF predicts:
1. Growth 2% for this year, 2.4% for 2019 and 2.2% for 2020. For the coming period, however, it anticipates a slowdown in growth: 1.6% in 2021 and 1.2% in 2022; for 2023.
2. Reduce unemployment to 19.9% for 2018, 18.1% for 2019, 16.3% for 2020, 15.2% for 2021, 14.4% for 2022 and 14.1% for 2023.
3 . The public debt is expected to increase to 188.1% of GDP this year (from 181.8% in 2017) to 177.1% in 2019, to 169.6% in 2020, to 162.9% 2021, 155.3% in 2022 and 151.3% in 2023.
In the report on debt sustainability, also included in the IMF report, the authors once again express their reservations about the potential of the Greek economy for achieve a primary surplus of 2.2% on a long-term basis.
This brings the bar back to 1.5% as a key badumption for primary surplus exposure. In fact, the IMF considers that it is a "turning point" for debt in 2038. After this year, it expects the rising cycle of debt to resume. as a percentage of GDP. That is why he is calling for new debt relief measures to ensure its long-term viability
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