March 16, 2020 / 10:22 PM / in 23 days

Greece gets fiscal leeway to tackle coronavirus crisis -finance minister

ATHENS, March 16 (Reuters) - Greece will have more fiscal flexibility to tackle the coronavirus and migrant crises and will not be constrained by a commitment to deliver previously agreed budget savings, its finance minister said on Monday.

Euro zone finance ministers discussed the impact of the coronavirus outbreak and measures to restart their economies via video call on Monday because of restrictive measures to contain the deadly respiratory virus.

The EU executive, worried that the outbreak could lead to a recession in the bloc this year, wants to allow European Union nations to run bigger deficits to help cushion businesses.

Euro zone finance ministers said on Monday the bloc had so far deployed a fiscal boost worth 1% of its gross domestic product to help the economy with the effects of the coronavirus epidemic and pledged to do more if needed.

Greek Finance Minister Christos Staikouras said finance ministers agreed that declining revenues and outlays to cushion the blow from the shrinking of economic activity would be taken into consideration when it comes to fiscal targets.

“As a result, this year’s primary budget surplus target of 3.5% of GDP for Greece no longer stands,” the minister said.

Under a post-bailout plan agreed with its official lenders, Athens aimed at a primary budget surplus, which excludes debt-servicing costs, of 3.5% of gross domestic product this year.

“Our country has the necessary degree of flexibility to take targeted initiatives to contain the social and economic impact of the coronavirus spread,” Staikouras said.

Greece’s request that spending to tackle the migrant crisis be excluded from its fiscal performance was also acknowledged by euro zone finance ministers, he said. (Reporting by George Georgiopoulos; Editing by Peter Cooney)

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