Troika to scrutinize draft budget
The government’s 2011 budget will be put together under the strict supervision of the troika of the European Central Bank (ECB), European Commission and International Monetary Fund (IMF). The Finance Ministry is busily drawing up the budget plan, as representatives from Greece’s foreign lenders are scheduled to arrive in Athens on September 13 to check that the draft budget includes everything slated in the memorandum for next year. The budget will be published on October 4 and will need to include a series of measures to further reduce Greece’s fiscal deficit. Yesterday, Finance Minister Giorgos Papaconstantinou met with his ministry’s general secretary, Ilias Plaskovitis, along with the head of the ministry’s Greek council of financial experts, Giorgos Zanias, as well as other officials to focus on the government’s finances for next year. In the meeting, the officials assessed how the economic downturn is likely to affect the composition of the budget, normally voted in by Parliament around Christmas. One area of concern for officials is solving the revenue shortfall for 2010. Sources said yesterday that additional tax hikes for 2010 are being ruled out and suggested that further cuts to the government’s public investment program may be used to offset the shortfall. A reduction in the public investment program would most likely result in lower spending on arms and infrastructure projects. In 2011, the government needs to take additional measures to slash 9.1 billion euros from the deficit. Deputy Finance Minister Filippos Sachinidis said yesterday that an earlier decision to impose higher value-added tax as of 2011 on a broader range of goods, such as foods and medicines, may be reassessed, depending on market conditions. Among the revenue streams the government is planning to draw on in 2011 is raising 700 million euros from rights on games of chance and 600 million euros from additional one-off taxes on profitable companies.
