ATHENS: Greece’s government on Friday pushed ahead with plans for a near-balanced budget next year, ignoring objections from its international lenders who say Athens is set to miss its deficit forecast.
The government and the European Union and IMF have been at loggerheads over the projected 2015 deficit, with the lenders arguing Greece will miss the 0.2 percent of economic output target because of a new payback plan for austerity-hit Greeks who owe the state money.
The government, however, stuck to the forecast in its updated 2015 budget plan that was submitted to parliament without the approval of the lenders, marking its first near-balanced budget in more than three decades. “We are fighting for it,” Finance Minister Gikas Hardouvelis told reporters. “There is some convergence, but they are pushing us on the budget.”
Athens — which says it has no more room for punishing Greeks with austerity — has struck an increasingly defiant tone as it haggles with the EU/IMF inspectors on what is expected to be the final review under its ¤240bn ($301bn) bailout.
The government is in talks with lenders to exit its bailout package at the end of 2014, more than a year ahead of schedule. It wants to wrap up the current bailout review by December 8, but says talks are “tough”.
After nearly five years on aid that has come at the price of painful cutbacks, Greece has made progress in getting its finances in order and its economy has begun to expand again. The budget reiterated the economy would grow 0.6 percent this year and 2.9 percent in 2015.
It also predicted the budget deficit for this year would be larger than previously estimated, standing at 1.3 percent from 0.8 percent forecast in the October draft budget.
Athens also lowered its target for a primary surplus this year to 1.8 percent from 2 percent previously and slightly raised the target for next year to 3 percent from 2.9 percent. Fitch maintained Greece’s ‘B’ junk rating and stable outlook, citing the “remarkable budgetary adjustment” by Athens in recent years.
Reuters
