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Eurogroup: Greece’s lenders concerned about the package of “relief measures”

The Eurogroup has warned Greece about the benefits and relief measures the parliament approved during the week. “Greece must continue to respect its commitments,” said Eurogroup chief Mario Centeno stressing at the same time that “Greece has overachieved on fiscal targets so far.”

Deputy Finance Minister  Giorgos Houliarakis briefed the Eurogroup on Thursday about the package of measures legislated by the government and said that they are in line with the agreed fiscal path.

, head of European Stability Mechanism Klaus Regling expressed his concern that “the primary surplus target of 3.5 percent this year might not be reached by a significant margin.”

during a press conference, Regling said among others that Greece’s “credit spreads have gone up by almost 50 basis points over the last few weeks.

Speaking about the “relief measures,” Regling said “We are worried about that. We don’t have a complete assessment but our preliminary assessment indicates that with these measures, the primary surplus target of 3.5% this year might not be reached by a significant margin. And that would be more so next year. Of course next year, a new budget will be needed and measures have not been implemented, so all that is a bit for the future. But for this year, the measures have been implemented and we are also worried about the composition of these budgetary measures, which are not growth-friendly in the medium and longer term.”

He added “Of course we will continue to work with the Greek authorities, the Commission obviously, and the ECB. There will be a report coming in the next Eurogroup meeting. But there are these concerns.”

Responding to a reporter’s question on “whether the decision by the Greek government to change the country’s fiscal targets are a violation of the debt-relief deal, and whether this has an impact on Greece’s early repayment to the IMF” Relging said:

“I think I would be a little bit more nuanced than what you said – you said that Greece changed unilaterally the fiscal targets, that’s not really correct. The disagreement is preliminary because we haven’t reached our final assessment. Greece maintains it fiscal target for this year, but there are doubts on our side whether the measures adopted by the parliament in the last few days are compatible with that. So that shows there is some work to be done, and work will happen, but at the moment, I would not say that questions this years’ target – that’s a different assessment.”

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