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Lagarde: Greece’s primary surplus at 3.5% is excessive, should be reviewed

The future President of the European Central Bank, Christine Lagarde, suggested that the Greece’s commitment to a 3.5% of GDP primary surplus target is “excessive” and should be reviewed.

Lagarde made this statement during her hearing before the Committee on Economic and Monetary Affairs of the European Parliament in Brussels on Wednesday.

Asked about the IMF’s standard position on Greek surpluses and to what extent she will defend this from the position of ECB President, Lagarde said that the IMF’s view and hers, still speaking from her position in the IMF, is that the 3.5 pct primary surplus for Greece is excessive and puts too much pressure on the recovery of the Greek economy.

Primary surplus at 1.2%-2% would help Greece to grow, she added among others.

The IMF continues to hold the same view and, as Greece is in the recovery phase, it is something that should be carefully reviewed.

Moreover, Lagarde welcomed the recent revision of the ECB’s role in stability programmes, noting that the ECB is now limiting its control to its areas of competence.

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