FM Staikouras in Parliament: The burden of the health crisis is fairly distributed

The government has distributed the burden of the crisis fairly, and assumed its largest portion, Finance Minister Christos Staikouras said on Thursday at the Parliament’s plenary session.

Staikouras also thanked households and businesses “for taking care by and large of their obligations to the state.” 

Primary surplus
Reviewing the state of the economy in relation to the coronavirus pandemic, the Finance minister said that the primary surplus obligation to its creditors of 3.5 percent (which the Greek government has sought to reduce) “is no longer valid as of Monday last week.” He added that the reduction of revenues because of the crisis “and the rise of expenditures for health, and the support of businesses’ liquidity, jobs, and social cohesion are exempted from the calculation of the country’s fiscal performance.”
In addition, following a recent decision by the European Central Bank, he said, Greek government bonds are acceptable under the new program, “a first since 2015,” when quantitative easing began without including Greece. Greece is recognized as a normal country now, not an exception, he said.
Staikouras called on the opposition parties to provide a cost analysis for their proposals, since they complain that the measures to relieve households and businesses during the coronavirus pandemic are not enough. The measures announced since the pandemic broke out in Greece have been assessed at 3.5 pct of GDP. “This is a much higher percentage than 2 pct of GDP, the average European ratio,” he stressed.

‘Cash buffer’
In terms of the so-called cash buffer that main opposition SYRIZA amassed and asks be used to fund its proposals, Staikouras said it comes to 15.7 billion euros, while the cash reserves of the central government and agencies at the Bank of Greece and commercial banks is the 20 billion euros that existed before 2015 (when Syriza came to power) and these reserves rise depending on several factors including servicing Greece’s debts. The two reserves are very different, he said, in nature, and the government will use any means available to face the emergency as efficiently as possible.

Growth in Q32019
Additionally, the basic GDP parameters registered greater rates of growth during the second half of 2019 compared to the first half, he noted, as did exports and investments. Private consumption rose the third quarter of 2019 to the highest level of any quarter since 2007. “There was a dynamic in the economy that we must build on when we get over the serious social and financial repercussions of the health crisis,” Staikouras said.


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