Greek PM on EU tour in bid to soften fiscal targets

Greek Prime Minister Kyriakos Mitsotakis will begin a tour of EU capitals this week, officials said Monday, in a bid to persuade the country’s creditors to alleviate tough fiscal targets.

Mitsotakis will begin his meetings with a trip to Paris on Thursday to see President Emmanuel Macron, a government source said.

He will then see German Chancellor Angela Merkel in Berlin on August 29 and Dutch Prime Minister Mark Rutte on September 2.

New Greek finance minister Christos Staikouras told the Financial Times this weekend that the government would swiftly implement a programme of tax cuts and privatisations to promote growth, reassure investors and “move the economy to an upward virtuous spiral”.

Mitsotakis, elected last month on a ticket of boosting growth, hopes to win agreement to cut the annual target of 3.5 percent of primary budget surplus which Greece’s previous leftist government had pledged to maintain to 2022.

Greece exited its final bailout last year.

Before his victory, Mitsotakis had expressed confidence that he could persuade Greece’s creditors to lower the primary surplus target with a front-loaded programme of reforms.

“I’ve…told my European partners that should we be able to deliver real reforms, we should be rewarded with smaller primary surpluses, at least in 2021 and 2022,” he told CNBC earlier this year.

“Symbolically it would be a reward for a country that is actually engaging in meaningful reforms,” he said.

The austerity, maintained by the previous government to boost credibility, is also intended to help cut a public debt that last year stood at 335 billion euros ($372 billion) or 180 percent of GDP.

The debt load is forecast to fall to 168 percent of GDP this year, but only through the belt-tightening brought in by the previous leftist government which Mitsotakis’s New Democracy party says is stifling growth.

Macron’s office on Monday said he would discuss with the new Greek PM “European and bilateral issues, in addition to eastern Mediterranean issues.”

Staikouras next month is expected to announce an early repayment of about one-third of the 8.5 billion euros ($9.4 billion) bailout debt that it owes to the IMF, the FT said.