Commission warns Greece about complying with agreed fiscal targets

Greece must comply with the fiscal targets that it agreed to with its creditors as part of its record-setting post-bailout procedure, European Commission Vice President Valdis Dombrovskis said on Wednesday in the wake of tax cuts announced by Greek Prime Minister Alexis Tsipras on 4 June.

“It’s important for Greece to stick to agreed fiscal targets,” said Dombrovskis, who added that there must be more extensive and in-depth discussions with the Greek authorities. In an effort to boost his sagging popularity Tsipras has announced controversial new measures that include a series of pension handouts ahead of the 7 July national elections.

His party, SYRIZA, is currently  9.4% behind the main opposition New Democracy.

Although Greece has made reasonable progress since exiting the third bailout program in August of last year, reform efforts have slowed in recent months, which have left the fiscal targets agreed with Eurozone lenders at risk.

The European Commission’s post-program surveillance reported noted that the consistency of some measures with commitments given to European partners is not assured and may pose risks to agreed fiscal targets.

Economic, Financial Affairs, Taxation, and Customs Commissioner Pierre Moscovici, said that the Commission’s third enhanced surveillance report on Greece found “a number of delays in the implementation of reform commitments” and “risks to the achievement of the budgetary targets following the package of measures adopted last month.”

Moscovici also said that the Commission must keep a close watch on the budget surplus in the coming months.

“Whatever the next (Greek) government (is), the Commission will continue to help Greece achieve a sustainable economic recovery. Today’s report is a starting point for the constructive dialogue that we wish to maintain with the Greek authorities,” Moscovici said.