1 Maintaining Greece’s primary budget surplus at its present level (6.7%) for 10-12 years – which is what is assumed in this exercise – would virtually remove the scope for easing the high tax burden on Greek citizens over the next 10-12 years and would imply little room for public spending increases.
It would be more realistic for the government to speed up and expand its privatisation plans, using the proceeds to reduce the debt stock. The government could also press ahead as fast as possible with the reform of the social security system (for example, along the lines implied by the Spraos Committee Report).