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8th Aug 2020

Greece to push through 2014 budget without creditors' approval

Greece's 2014 budget is set to hit the statute book without the approval of the country's creditors, after the country's government tabled its spending plans to the Greek parliament.

The Greek government tabled its draft budget on Thursday (21 November) shortly after Troika officials - representing the European Commission, European Central Bank and International Monetary Fund - left the country without reaching agreement on the 2014 tax and spending plans.

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  • The Greek parliament will vote on its 2014 budget in early December (Photo: Constantine Gerontis)

The current review of Greece's progress began in September but has since stalled. No more funds from Greece's €240 billion loan package will be released until there is an agreement.

After six consecutive years of recession which have wiped out more than 25 percent of its economic output, the Greek economy is expected to grow by a meagre 0.6 percent in 2014.

The country also expects its primary surplus to hit €812 million for 2013, before rising to €2.96 billion in 2014.

However, as a result of interest payments on its debts, which currently amount to around 190 percent of GDP, the government said it expected a gap in funding to the tune of between €500 million and €800 million next year.

For its part, the latest estimate of the Troika puts the shortfall at around €1.5 billion.

“For the first time, the major sacrifices made by the Greek people are paying off, with the first signs of recovery this year,” said deputy finance minister Christos Staikouras.

"Good progress has been made, but a few issues remain outstanding," said a statement by the Troika on Thursday (21 November). It added that the budget "could serve as a basis for the completion of the ongoing review of the country’s economic programme."

Troika officials will return to Athens in December. Deputies in the Greek parliament will also vote on the budget in early December.

Commission spokesman Simon O'Connor Thursday admitted that the two sides were still some way apart.

"From our point of view there are further discussions that need to take place on this before we can say whether we agree," he said, commenting that "the possibility is there for Greece to table a supplementary amending budget."

Earlier, economic affairs commissioner Olli Rehn told MEPs in Strasbourg that he expected the review to be completed in either December or January.

But pressure remains on Greece to make further spending cuts, reform its tax framework and complete a sell-off of its remaining state-owned assets.

For his part, Eurogroup chairman Jeroen Dijsselbloem told a Greek newspaper, the Ta Nea daily, that "many finance ministers of the eurozone are starting to lose patience" with Athens.

Eurozone finance ministers will meet in Brussels on Friday (22 November) to discuss recommendations made earlier this month by the commission to reform national budget plans.

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