ECONOMY

Gov’t drafts system to contain deficit, debt and spending

The government is planning a new system to try to contain the budget deficit, the national debt and expenditures, which are where the biggest problems are to be found, through a bill to be completed by the end of this month and tabled immediately afterward in Parliament. Earlier, from June 14 to 18, representatives of the International Monetary Fund will be in Athens to monitor the execution of the memorandum of the European Union and IMF and to offer fresh instructions where there appear to be delays. «The emergency financing mechanism, which is part of the framework of the Greece program, requires regular staff visits,» said David Hawley, a senior adviser on external relations at the IMF in Washington. «This is an interim mission, meaning that there is no disbursement of financing linked to this mission.» He made it clear that talks with the Greek government will concern «recent developments and implementation under the program.» The IMF is returning to Athens in order to prevent any wrong steps by the government prior to the drawing up of July’s formal report regarding the implementation of the memorandum. After all, the second installment of the loan, scheduled to arrive in August, will depend on the contents of the July report. To ensure no such problem emerges, the government’s new bill will include the fiscal rules that determine the limits within which range the expenditure, deficit and debt can fall, and the new formula for drafting, monitoring and controlling the budget. It will fulfill the government’s pledge to legislate that the State General Accounting Office publish budget data each month as promised in its agreement with the IMF, EU and European Central Bank. Meanwhile, the loan contract that the government signed with the other eurozone members for the disbursement of some 80 billion euros and which was tabled yesterday in Parliament contains some very painful conditions. It allows the IMF, ECB and EU to assume full control of public finances and have the right to terminate the contract. No Greek properties will be immune to confiscation by the lender if the country does not fulfill its obligations.