Rosy forecast seeks to fund social initiative but creditors skeptical

TAGS: Politics, Economy

The government on Thursday presented representatives of Greece’s international creditors with its budget forecasts, which paint a more positive picture then previously anticipated and would allow authorities to fund a social security income program in 2017 for poorer Greeks.

According to Greek officials, belt-tightening measures enforced this year have borne fruit with revenue higher than initial estimates.

The additional revenue is adequate to fund the leftist-led coalition’s social security income program, the cost of which is estimated at 720 million euros a year, while also allowing the government to post a primary surplus of 1.75 percent of gross domestic product.

It was unclear on Thursday how foreign envoys had reacted to the government’s rosier fiscal estimates. Earlier this week they were said to have voiced concerns about Greece’s proposals for funding the program.

According to sources, foreign officials also expressed serious reservations about the government’s plans – unveiled by Prime Minister Alexis Tsipras during his speech in Thessaloniki last week – to freeze the old debts of self-employed professionals and issue them with social security clearance allowing them to legitimately do business.

Foreign officials countered that such initiatives undermine efforts to create a “payment culture” in Greece and object to the government consistently offering “last chances” to those late or inconsistent in paying taxes and social security contributions.