EUROZONE FINANCE MINISTERS are “losing patience” with Greece as the government unveiled its next budget without concluding an EU-IMF audit.
The first details of the budget said that the deep recession in the economy would end next year with 0.6 per cent growth, following a 4.0 per cent contraction in 2013.
However, Eurogroup president Jeroen Dijsselbloem told the Greek daily newspaper Ta Nea that “many finance ministers of the eurozone are starting to lose patience”.
A statement issued by the International Monetary Fund early today said that auditors from the IMF, the European Central Bank and the European Commission had concluded their latest visit to Greece to review progress on the country’s economic programme, without reaching a full agreement.
Such audits determine whether or not Greece receives the next installment of rescue funding.
Greece’s Finance Minister Yannis Stournaras, second left, gives an envelop and a disc containing the new draft state budget for 2014 to Parliament speaker Evangelos Meimarakis. (Image Credit: AP Photo/Petros Giannakouris)
It said that “good progress has been made, but a few issues remain outstanding. Talks would continue from the headquarters of the three creditor bodies and the auditors would return to Athens “early in December”, the statement said.
“Productive” on the policies
The IMF said that the discussions had been “productive” on the policies “that could serve as a basis” for completion of the review.
It later said that it saw no near-term “acute” financing pressures on Greece under its international bailout program.
“We believe that Greece’s financing needs in the coming months can be met from the existing liquidity buffer,” IMF spokesman Gerry Rice said.
We see no acute financing pressure.
The budget being published today signals slim growth in the Greek economy after six years in a row of biting recession.
But the budget, which will be voted on in December, is likely to require revision soon as Greek officials have yet to agree with the country’s creditors on how to close a looming fiscal gap next year.
“I cannot say now that we are fully in agreement with the budget,” EU economic affairs spokesman Simon O’Connor told reporters in Brussels.
“There are further discussions that need to take place on this before we can say we are fully in agreement with it,” he added.
We shall have to see how that evolves in coming weeks … Greece has the possibility of submitting an amended budget.
The troika predicts the 2014 fiscal gap will exceed €1.5 billion, while the Greek government estimates the sum to be slightly more than €500 million.
Discussions are also stumbling on the issue of a new property tax, possible new pension cuts as well as layoffs in the state sector, and the slow pace of privatisation.
The EU-IMF fiscal audit, necessary to unblock a €1 billion installment of financial aid, is now expected to drag on until Christmas.
Plenty of work to do
“Greece still has plenty of work to do,” Dijsselbloem told Ta Nea, noting that the EU-IMF talks in Athens were focusing on Greece’s “progress, or rather, lack of progress, on its commitments”.
The budget today predicts a surplus excluding debt service charges of some 3.0 billion euros or 1.6 percent of GDP.
It also forecasts a small dip in the country’s debt mountain to 320 billion euros, or 174.8 percent of output.
Unemployment is also expected to drop to 24.5 percent, from 25.5 percent in 2013, with state is expected to earn €3.65 billion from privatisations.
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