, worldwide factors also justify the reduction of the primary surplus fiscal target. in this context, christine lagarde ’ s comments yesterday in the european parliament arguing for a lower primary surplus in greece are fully justified. d. conclusions the above mentioned economic developments along with the recent elimination of capital controls, are expected to facilitate the reinstatement of greek government bonds to investment grade status soon, which will pave the way for their inclusion in the ecb ’ s asset purchase 5 / 6 bis central bankers'speeches programme. this, in turn, will further lower borrowing costs for the greek economy, thereby boosting growth and improving debt sustainability. in such a benign scenario, higher growth rates than currently projected, that is a growth rate close to 3 %, could be achieved through increased investment, taking also into account the still negative output gap. having said all the above, greece at the moment has a narrow window of opportunity given the global conditions of still positive growth rates and the current low interest rate environment. the government should proceed with its reform programme as quickly as possible to deal with the medium and long - term risks of the greek economy and address challenges such as low productivity growth, demographic trends and low investment, as these favourite conditions might be reversed anytime in the future, given the downside risks in the world economy. 6 / 6 bis central bankers'speeches

upgrades in the rating of the banks, along with the expected upgrades in the rating of the sovereign. in turn, this would support their efforts to further improve their liquidity and, in line with the decrease in the sovereign ’ s cost of funding, to issue unsecured bonds. against this background, one can be confident that the liquidity of the greek banking system will be further strengthened in the coming months. c. fiscal developments in 2019 and projections the legislation of an expansionary fiscal package in may 2019 put at stake the attainment of the primary surplus target of 3. 5 % of gdp agreed in the context of the enhanced surveillance. according to bank of greece estimates, with end of june fiscal data, a fiscal gap of about 0. 6 % of gdp was projected for 2019. this development necessitated an adjustment of expenditure in order to fulfill the fiscal targets in the context of the enhanced surveillance. indeed, latest ( august ) cash fiscal data indicate, according to the bank of greece, that the 2019 fiscal target will be met. this outcome is driven by adjustment of expenditure as well as by revenue over - performance ( mainly vat ) in the last two summer months. however, fiscal risks are tilted to the downside and mainly relate to the yield of the latest instalment scheme. another downside risk relates to the pending court decisions reversing past pension cuts. this would entail a one - off expenditure in retroactive payments. there is, furthermore, an additional risk of a permanent increase in expenditure on a yearly basis in case the council of state rules that the provisions of the 2016 pension reform are unconstitutional too. although the latter decision is expected by october, any development is unlikely to affect the 4 / 6 bis central bankers'speeches 2019 budget year. the general government debt is projected to decline, driven mainly by primary surpluses, and a favourable interest - growth rate differential. the debt sustainability analysis of the bank of greece shows that the debt relief measures agreed by the eurogroup on 21 june 2018 considerably improve debt sustainability in the medium term, but risks remain elevated beyond the early 2030s. further revenue gains could be generated from wider use of non - cash transactions. bank of greece research estimates that an increase by one percentage point in the share of private consumption spent through payment cards increases vat revenue by 1 % through increased compliance. the gradual relaxation of cash restrictions experienced so far does not appear to be reversing the use of cards, albeit the increase in the share