ECONOMY

Budget denotes IMF departure

The departure of the International Monetary Fund from the Greek funding program was revealed by the absence of its loans from the 2015 draft budget tabled on Monday in Parliament by the Finance Ministry.

Although there is no explicit reference to the end of the country’s financing by the Fund, which the government has already hinted at, the details of the draft point in that direction, as the chart showing the loans to Greece from the eurozone and the IMF for 2015 do not show the debt of 9.2 billion euros to the IMF as was expected.

The first draft, tabled on Monday for examination by the competent parliamentary committee, provides for a primary surplus of 2 percent of gross domestic product for this year, against a target for 1.5 percent, and a primary surplus of 2.9 percent for 2015. Forecasts also include an increase in investment (by 11.7 percent) and the strengthening of private consumption.

“The country is entering a long period of sustainable rates of economic growth and of primary surpluses, which will bring an increase in employment, a reduction in the jobless rate and an increase in the living standards of all citizens,” commented Alternate Finance Minister Christos Staikouras on Monday.

Greece will borrow 9 billion euros within 2015, which may even rise to 12 billion, with the issue of seven-year and 10-year bonds, along with the issue of treasury bills with a maturity period of more than six months. The state debt is forecast to drop from 174.8 percent of GDP this year to 167.9 percent, or 316.1 billion euros.

Although there are no new austerity measures included, the budget provides for an increase in revenues from direct and indirect taxes by 1.7 billion euros. Primary spending is reduced by 672 million euros, but without affecting salaries or pensions. Still, ministry officials express concern about missing the spending target in case the number of pensioners beats expectations.