Bud­get with­out troika ap­proval

Fi­nance min­is­ter ex­pected to sub­mit the fi­nal draft in Par­lia­ment to­mor­row with ne­go­ti­a­tions still on­go­ing

Kathimerini English - - Focus - BY SOTIRIS NIKAS

Fi­nance Min­is­ter Gikas Har­dou­velis is set to ta­ble the fi­nal draft of the 2015 bud­get in Par­lia­ment to­mor­row with­out hav­ing se­cured the ap­proval of the coun­try’s cred­i­tors. It will be based on the midterm fis­cal plan agreed by Athens and the troika.

The rep­re­sen­ta­tives of the coun­try’s three cred­i­tors – the Euro­pean Com­mis­sion, the Euro­pean Cen­tral Bank and the In­ter­na­tional Mon­e­tary Fund – are for now stick­ing to their es­ti­mate for a fis­cal gap next year that could reach up to 3.6 bil­lion euros as things stand, while the gov­ern­ment con­tin­ues to re­ject this fore­cast, poignantly re­call­ing that the troika had also an­tic­i­pated fis­cal gaps for last year that never ma­te­ri­al­ized.

In this con­text the 2015 bud­get, with no new aus­ter­ity mea­sures, pro­vides for a pri­mary sur­plus of 3 per­cent of gross do­mes­tic prod­uct. Sources also said that this year’s pri­mary sur­plus will amount to 1.8 per­cent of GDP, against a tar­get for 1.5 per­cent.

Of­fi­cials fa­mil­iar with the gov­er­ment’s ne­go­ti­a­tions with Greece’s cred­i­tors say that the troika does not in­tend to budge on its es­ti­mates, in­sist­ing on last-minute changes to the bud­get so as to guar­an­tee that the tar­get of a 3 per­cent pri­mary sur­plus is at­tained. Such changes would en­tail new mea­sures, which the gov­ern­ment clearly re­jects, con­sid­er­ing some meth­ods it has re­sorted to in the past to over­come such dead­locks, the same of­fi­cials note.

The most likely strat­egy would be to let the first few months pass so as to see which side was right in its es­ti­mates, and if the troika is the one to be proven cor­rect then there would be two op­tions: to re- vise the es­ti­mates through the next midterm fis­cal plan, set for Fe­bru­ary or March 2015, or to ta­ble a sup­ple­men­tary bud­get that would bridge any gaps cre­ated.

The troika be­lieves some changes might be in­tro­duced to the bud­get even after the de­bate in Par­lia­ment has started, but the gov­ern­ment is aware of the ne­go­ti­a­tion process’s tight timetable and re­al­izes such a pos­si­bil­ity is quite un­likely.

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