ECONOMY

Greece to stick close to 2015 budget surplus target, official says

Greece plans to lower its 2015 primary surplus target of 3 percent only marginally, sticking “close to” the number in its budget on Monday, a finance ministry official said on Friday.

The official was responding to reports of a bigger cut to accommodate tax relief measures.

“What’s being reported in the media that the primary surplus target will be much lower than 3 percent is not true,” the official said.

The target is one of several agreed with the European Union and International Monetary Fund as part of the country’s 240-billion-euro aid package. Greek media have reported Athens could cut it to about 2.3 percent to give the government the leeway to introduce steeper tax cuts.

Athens has been trying to convince its EU/IMF lenders to move away from austerity measures and focus on efforts to revive the economy and preserve fragile political stability in a nation struggling through a six-year austerity-fuelled recession.

Greece will submit its 2015 budget to parliament on Monday amid a review by the “troika” of inspectors from the EU and IMF lenders who are in Athens for what is expected to be their last review under the bailout.

The bailout is due to end in early 2016, but Athens says it wants to quit as early as next year.

The budget surplus is a sign of the progress Greece has made in fixing its finances during an economic crisis that wiped out almost a quarter of its GDP and sent unemployment to record highs of nearly 28 percent.

In a speech in September, Prime Minister Antonis Samaras said a heating oil consumption tax would be cut by 30 percent and a “solidarity tax” would also be reduced, with details presented in the 2015 budget. The government also plans to cut the top rate of income tax and reduce corporate and property taxes.

Greece topped its fiscal targets and achieved a budget surplus in 2013 a year ahead of schedule, paving the way for some form of additional debt relief from its euro zone lenders. Talks on further debt relief will start later this year.

It is also expected to beat its budget surplus before interest payments, of 1.5 percent of GDP, for this year.

[Reuters]