Greece says wants wriggle room on debt management

Greek Prime Minister Kyriakos Mitsotakis on Thursday said his country, recovering from a decade-long debt crisis, wanted more freedom to manage its annual primary surplus. "If we overperform in one year, let it count towards the next year," Mitsotakis said at the Davos economic forum.

"We don't have a smoothing mechanism for our primary surplus. So if we deliver a bigger primary surplus, as we will in 2019, there's no way for me to carry it over to the next year." "It doesn't make any sense whatsoever. Then my incentive is to spend it at the end of the year. That's not serious fiscal policy," Mitsotakis said.

Under the terms of its final bailout, negotiated by the previous leftist government, Greece must produce a primary budget surplus of 3.5 percent of GDP until 2022 and of 2.2 percent of GDP on average to 2060. Primary budget surpluses exclude government debt interest payments.

In its latest budget, Athens forecasts a primary surplus of just over 3.5 percent of GDP in 2020. Elected in July on a ticket of tax cuts and growth, the conservative Mitsotakis has vowed to renegotiate the 3.5 percent target.

Athens is "on a good path to convince our creditors to relax our fiscal targets for 2021," he said Thursday. Mitsotakis also insisted Thursday there was "no real issue" regarding Greece's long-debated debt sustainability.

"We're sitting on close to 40 billion (euros) on cash reserves," he said, referring to a sum largely gathered by the previous government through high taxation believed to have contributed to their electoral loss. "Our debt may be high in objective terms but if you look at our repayment schedule until 2032 it's extremely benign," the PM said.

Greece aims to borrow between 4.0 and 8.0 billion euros ($4.4-9 billion) in 2020, following a year that saw the country's once-soaring credit rates drop into negative territory. The Greek public debt agency says the country's total debt burden is expected to decrease from 181 percent of GDP (335 billion euros) in 2018 to 173 percent of GDP (329 billion) in 2019.