Greece Must Legislate Contingency Measures, says Eurogroup Chief

Dijsselbloem_Eurogroup1Greece must legislate a package of contingency measures to guarantee it will reach the 2018 fiscal targets, said Eurogroup President Jeroen Dijsselbloem on Friday.

The Dutch finance minister spoke to reporters after the meeting with his euro zone peers in Amsterdam. He also said that the preparation of the measures is a prerequisite for the completion of Greece’s ongoing bailout review.

“We came to the conclusion that the policy package should include a contingent package of additional measures that would be implemented only if necessary to reach the primary surplus target for 2018,” Dijsselbloem said in the news conference.

During negotiations between Greece and creditors, Prime Minister Alexis Tsipras had stated that Greece will only implement the reforms agreed on July 2015 and “nothing more and nothing less.” He had also said that the contingency measures will only be taken after creditors begin to discuss debt easing for Greece.

Greece and European creditors have agreed to a primary surplus target of 3.5 percent of GDP in 2018, but the International Monetary Fund doubts Greece can reach that target with the measures and reforms it has agreed on so far. The IMF has asked for additional measures that would secure the fiscal target.

According to Dijsselbloem, the contingency measures need “to be credible, legislated up-front, automatic and based on objective factors.”

Greek Finance Minister Euclid Tsakalotos told reporters after the Eurogroup meeting that Athens cannot legislate measures in advance because it is unconstitutional. However, he said, the SYRIZA-ANEL coalition is very inventive and they will find ways to implement measures if fiscal targets are not met.