Greece submits last bailout budget but austerity continues - InfoNews

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Greece submits last bailout budget but austerity continues

People stand in front of the Greek Parliament, as vehicles drive past, in central Athens, on Tuesday, Nov. 21, 2017. Lawmakers are preparing for a debate on the 2018 budget, expected to be the last under an international bailout, but the government has promised it will maintain high primary surpluses and painful austerity measures, in the hope of winning more favorable debt repayment terms. (AP Photo/Petros Giannakouris)
November 21, 2017 - 11:59 AM

ATHENS, Greece - Greece's government is promising bailout lenders continued austerity and high primary budget surpluses in its 2018 budget, the last under eight years of international rescue programs.

In the budget submitted to parliament late Tuesday, the government set targets for primary surpluses — the budget balance before debt repayment — higher than previously estimated, at 2.44 per cent this year and 3.82 per cent in 2018.

Greece is racing to complete the latest round of negotiations with rescue creditors by the end of the year, before the current bailout ends in August and the country will have to return to market funding.

According to the document summited to parliament, the Greek economy is forecast to grow by 1.6 per cent in 2017 and by 2.5 per cent next year — helped by a return to growth across Europe.

With the size of the Greek economy reaching 185 billion euros ($271 billion) in 2018, the national debt is set to remain at just under 180 per cent of gross domestic product, roughly unchanged from the previous year.

Prime Minister Alexis Tsipras' left-wing government will roll out fresh tax hikes and pension cuts over the next two years. Bailout lenders had demanded additional guarantees that the Greek economy will be stabilized before considering additional measures to improve the terms of debt repayment.

The government, not facing elections until 2019, is badly trailing opposition conservatives in opinion polls, but has narrowed the gap slightly in recent months.

Greece had the European Union's fastest growing rate of poverty during its protracted financial crisis. More than a third of the population is living in or at risk of poverty, according to the EU statistics agency. Bulgaria and Romania have the highest rates, with Greece ranking third.

The government last week promised a one-off payment worth 1.4 billion euros ($1.6 billion) from the 2017 budget to top up welfare programs.

Lawmakers will vote on the 2018 budget on Dec. 22, following a four-day parliamentary debate.

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News from © The Associated Press, 2017
The Associated Press

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