Final budget draft adjusts primary surplus

The final draft of the 2015 state budget, which is to be tabled in Parliament next Friday, provides for a primary surplus of 3 percent of gross domestic product after this year’s 1.8 percent. Despite pressure by the country’s creditors, who have estimated a 2015 fiscal gap of as much as 3.6 billion euros, the government insists its forecasts are right and says it will not adopt any new austerity measures.

The first budget draft had provided for a 2.9 percent primary surplus for next year against a 3 percent target seen in the midterm fiscal plan, which the final draft now chimes with.

The changes introduced from the first draft concern the containment of local authority spending so as to meet the midterm plan’s targets, speeding up the restructuring of state corporations, and improving the budget results by bringing entities such as the Thessaloniki Public Transport Organization into the government sector.

Ministry officials say that these measures combined with other interventions to non-salary costs have been grouped and forwarded to the creditors’ representatives for approval. It is estimated that these actions could bring in as much as 1 billion euros, thereby ensuring the achievement of the fiscal target for 2015.

The precise value of this group of measures is being negotiated with the creditors, who are examining the actions and their impact. Once they have completed their study, they are expected to issue their revised estimate on next year’s fiscal gap.

Officials familiar with the negotiations with the creditors say that the latter are reassessing the impact of the recent government interventions, such as the settlement of corporate and household debts, and consider the estimate for the gap to be below 3.6 billion euros after all.

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