Former Greek Finance Minister Says 2013 Draft Budget to Change

Greece’s 2013 budget draft will change significantly because talks with international creditors have yet to conclude, Pasok lawmaker and former Finance Minister Filippos Sachinidis said.

“Today we discuss a budget draft for 2013 which was tabled in order to meet a constitutional provision,” Sachinidis said today in Athens at the first parliamentary debate of the bill. “It’s clear that the fiscal adjustment in 2013 will be much more front-loaded compared to the draft.”

Key issues such as debt sustainability, the size of the fiscal adjustment needed through 2016, and especially in 2013 and 2014, and how to cover Greece’s financing gap aren’t included in the draft, Sachinidis said.

Greece’s government is in talks with international inspectors on how to carve out a 13.5 billion-euro ($13.5 billion) package of of new budget cuts required for continued aid under two bailouts totaling 240 billion euros. Agreement on the measures is imperative to allow the release of 31 billion euros of bailout funds designed mainly to recapitalize the nation’s banks in a cash-starved economy.

“We don’t have the luxury to delay,” said Sachinidis, who served as finance minister from March 2012 until elections in May. “Every day that goes by without the tranche being disbursed businesses are closing and jobs are being lost.”

Greece’s unemployment rate has risen to almost 25 percent and the economy will contract for a fifth year under the weight of austerity. Greece got its first European Union and International Monetary Fund bailout in May 2010.

Delays by Europe and Greece in taking action earlier are to blame for the Mediterranean country’s deepening crisis, he said. Action must be taken at this critical juncture for Europe as “it’s not just the southern countries but the eurozone itself which is put at risk by the systemic dangers.”

To contact the reporter on this story: Natalie Weeks in Athens at nweeks2@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net

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