Program adjustment issue raised by Stournaras at the Eurogroup

Finance Minister Yannis Stournaras indirectly raised the issue of Greece’s adjustment program to his European counterparts in light of the wrong estimations about the recession.

He asked them to draw conclusions from the economic policy debate on the wrong fiscal multipliers, which means a softer fiscal adjustment program while increasing the funding for Greece.

According to the Kathimerini newspaper, the ministry is even considering proposing a reduction of indirect taxes to the Troika, as their increase has not produced the expected results.

The Fund must escape academic analyses, Stournaras said after the Eurogroup meeting in Brussels. He mentioned the report of the supreme IMF economist Olivier Blanchard, who admitted that the IMF made a mistake in its calculations about Greece. Reportedly, he asked Christine Lagarde for specific explanations as to whether the IMF was wrong about Greece or not.

On February 21 the Eurogroup council of experts (EWG) will meet to approve the disbursement of the 2.8 billion sub-tranche for Greece. The only condition, as Stournaras assured yesterday, is the preceding vote for the medium-term program and the three-year expenditure caps per ministry by the Greek parliament. The agreed layoffs of public servants and the new lists of medicines are prerequisites for the sub-installment of March.