Greece is back under the spotlight. On Monday, the directors of the Research and the European departments of the International Monetary Fund (IMF), respectively Maurice Obstfeld and Poul M. Thomsen, published a co-authored post on the IMF blog, arguing that the financial institution does not endorse further austerity measures for Greece. In particular, the two directors said that any primary budget surplus objective that will be set in the frame of the current negotiations of the second review should be realistic and support a long term growth path for the country. With the post the IMF made it clear that it should not be held responsible for further austerity measures undertaken by the Greek government. The IMF’s take on the matter, once more highlighted the deep divisions within the creditors’ front. The bone of contention remains the budget objectives that Athens should pursue from 2018 onwards: whereas the IMF pushes for a 1.5% surplus, Germany is said to defend a more ambitious target of 3,5%. Next Friday, the Greek and German Prime Ministers, Alexis Tsipras and Angela Merkel, are expected to meet in Berlin to ease off these disagreements.

Meanwhile austerity-related discussions are gaining prominence as well in Madrid. On Friday, the Spanish government confirmed that the country needs to save approximately €26 billion over the next two years, in order to comply with the targets set by the European Commission in the frame of the European Semester. On Monday, the Spanish Minister of the Economy, Luis de Guindos called for the EU to radically change its economic policies. In particular, de Guindos argued that the Eurozone need to build a common fiscal policy capacity and defended the EC’s recent initiative to allow room for a €0.5 billion fiscal stimulus for the European economy.

The refugee crisis makes the headlines in other news across Europe. On Thursday, the European Commissioner for Migration Dimitris Avramopoulos, announced that from March 2017 onwards the Dublin regulation will start again to regularly function across the EU. In particular, illegal migrants will be relocated to the country of entrance to the EU. The measure is expected to especially burden Greece and Italy, who are still dealing with the influx of migrants from the Mediterranean sea. Meanwhile, in northern France, the UK and French authorities finalized the construction of a wall in the town of Calais to hinder new migrants from reaching Britain through the Channel.

The elections of the new President of the European Parliament continues to be one of the main concerns of the Brussels political class. After the Social and Democrats (S&D) and GUE/NGL political groups in the EP announced their candidates during the past few weeks, on Monday the centre-right European Popular Party group (EPP) announced the candidates in its primary elections. Alain Lamassoure, Mairead McGuinness, Alojz Peterle and Antonio Tajani are the personalities that will take part in the upcoming primaries, to be held on Tuesday afternoon.


“[The struggle against nationalism in Europe] entails an ideological fight as it was the case during the Cold War”

Frans Timmermans, Vice-president of the European Commission

Source: Handelsblatt, 13.12.2016



The growth forecast made by the Greek government as it approved its 2017 budget

Source: Ekathimerini, 11.12.2016

Photo Credits CC Filippo Minelli

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