Greece expecting better days
A draft budget for 2014 predicts the economy will grow 0.6% after years of crisis from debt woes.
ATHENS — In the strongest sign yet of economic recovery, Greece’s ruling coalition on Monday unveiled a draft budget for 2014 that foresees growth in the country’s debt-crippled economy, which is emerging from the doldrums after six years of painful austerity.
Initially hit by global market turmoil in 2008, Greece has been at the center of the European Union’s debt woes since late 2009, when the government exposed a crushing debt built up during years of dubious state bookkeeping.
Sovereign European lenders and the International Monetary Fund stepped in, pledging about $330 billion, at current exchange rates, to keep the laggard economy from defaulting and the euro, Europe’s common currency, safe.
In return, Athens has had to impose bitter budget cuts and tax hikes — measures that precipitated popular protests and political turbulence as incomes fell by at least 25%, hundreds of thousands of small businesses went bankrupt and unemployment shot up to 28%, putting Greece at the center of a global debate over the merits of austerity.
“From this year, the sacrifices are starting to take hold, creating the first signs of the country’s exit from the crisis,” Deputy Finance Minister Christos Staikouras told reporters.
“With the state budget for 2014, these first significant achievements are being capitalized on, consolidating the stabilization of public finances and improving conditions for the gradual return to a growth path.”
According to the budget, Greece’s crisis-ravaged economy will grow 0.6% next year after contracting an additional 4% in 2013. Unemployment is also predicted to ease, with the jobless rate dropping to 26%, which would still be among the highest in the 17-nation Eurozone.
Market analysts greeted the upbeat forecasts, however encouraging, with guarded optimism. And the reform-minded Staikouras warned that the government would not let up on austerity.
“These positive developments must add impetus to our efforts and not allow any relaxation, because Greece’s chronic structural fiscal problems … have not been fully addressed,” he said.
Fears remain that the bailout program may fall short of Greece’s financing needs by about $13.5 billion in 2014-15.
A troika of international lenders from the EU and the IMF returns to Athens this month to review the draft budget with the Greek government before a final version is put to a vote in Parliament this year.