Amid much international tumult – with Trump economic ideas being gradually converted to effective trade war, with growing disruption to global supply chains, with a new triangle of instability (US-China-Europe) coming to the fore – and quite a lot of European uncertainty – once more Italy rocks the boat, in Germany the AfD disrupts the balance of the political system, in the Boris Johnson UK no-deal Brexit looks like the default option – the new Greek Government has started down the path of revising the country’s relations with its European creditors.
The central priority for the tax-cutting policies which are a central part of its proclaimed economic policy is getting fiscal space from them; since the Greek economy labours under the agreed-upon primary surpluses of 3.5% of GDP, to be achieved until 2022, such fiscal space can be won only if Greece’s European creditors accept that primary surpluses be diminished.
But the fragility of political situations all around Europe makes risky any frontal approach in the form of renegotiation over the conditions for Greek debt relief (as achieved until now) as well as of overhaul of the country’s enhanced post-Programme surveillance. So, the tactics adopted are to insist on structural reform measures, to bring about as many tax-cuts as allowed under present constraints – and to pray that growth will resume, so that negotiation of the future Greece situation be made more palatable to its European creditors.
This was the approach of Kyriakos Mitsotakis in his visit to Paris, to build a beachhead with President Emmanuel Macron; now forward to Berlin to test the ground with Chancellor Angela Merkel.