Greece may face sanctions from its creditors on budget surplus reduction

Greece may face sanctions from its creditors in the euro zone after the Greek Prime Minister Alexis Tsipras announced Tuesday, to reduce the target core budget surplus from 3.5 to 2.5 percent of GDP.

The Greek media pointed out that this may occur despite the certainty expressed by Tsipras that his peers in the euro area will not reject the reduction target, because Athens will put 5.5 billion euros of the country’s cash buffer in a special account as collateral.

According to sources close to the discussions in Germany, the Bloomberg economic news website noted that Greece’s creditors are open to imposing sanctions on the country because of the potential breach of debt obligations due to plans to reduce the basic surplus from the agreed level until 2022.

Bloomberg sources said possible sanctions could include blocking Greece’s share of ECB bond yields.

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