Budget to go to Brussels without pension cuts

Budget to go to Brussels without pension cuts

The government is on Monday planning to present the European Commission with Greece’s 2019 draft budget, which does not include the agreed cuts to pensions, according to sources.

Finance Minister Euclid Tsakalotos discussed the issue during talks in Bali, Indonesia, on Saturday but the government appeared determined to proceed with this baseline scenario, which is also its main position, hoping for support from the European Commission.

A ministry source said last Thursday, “The Commission acknowledges the achievement of the target” – i.e. that the primary budget surplus will reach at least 3.5 percent of gross domestic product even without the pension cuts planned.

European Commissioner for Economic and Monetary Affairs Pierre Moscovici left the issue open in an interview on Bloomberg TV on Thursday, saying that he expects to see a credible draft budget on Monday and that the Greek prime minister and finance minister “know very well that first we respect our pledges and then we proceed to discussions.”

He did not clarify whether he was referring to the pledge for the pension cuts or the 3.5 percent primary surplus, which the government argues will be achieved in 2019 without the pension reduction, to reach 3.55 percent of GDP.

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