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Greece Submits 2014 Budget as Troika Leaves Athens

Nov. 21 (Bloomberg) -- Greece submitted its 2014 budget plan forecasting a bigger surplus before interest costs this year than previously anticipated, strengthening its hand in talks with creditors over releasing further bailout funds.

The primary surplus will be at least 812 million euros ($1.1 billion) this year, instead of the 344 million euros forecast last month, rising to 2.96 billion euros in 2014, or 1.6 percent of gross domestic product, according to the plan submitted to parliament by Finance Minister Yannis Stournaras. The figure excludes transfers received from the euro area corresponding to European Central Bank profits on Greek bonds, which are not accounted for in Greece’s bailout evaluation.

Under the accord with the troika of the European Commission, International Monetary Fund and ECB, posting a primary surplus will qualify Greece for additional debt relief. The government and troika officials have been locked in talks since September, with the two sides disagreeing over fiscal measures needed for the country to achieve its 2014 budget projections. The troika mission chiefs will leave Athens today and return early next month, according to a statement.

‘Good Progress’

“Good progress has been made, but a few issues remain outstanding,” the Commission, IMF and ECB said in the joint statement today. The troika held “productive discussions with the authorities on the set of policies that could serve as a basis for the completion of the ongoing review,” they said.

The European Union’s Economic and Monetary Affairs Commissioner Olli Rehn said today that the review will conclude by January at the latest.

Greece’s budget plan sees GDP rising 0.6 percent in 2014 after falling 4 percent this year, its sixth year of recession. Unemployment is seen averaging 24.5 percent next year from a 25.5 percent average rate in 2013.

The overall budget deficit will widen to 2.3 percent of GDP in 2014 from 2.2 percent of GDP this year, excluding the cost of recapitalizing the country’s lenders, according to the budget. Public debt is seen coming down to 174.8 percent of GDP next year from 175.5 percent this year.

Parliament will vote on the budget plan on either Dec. 7 or Dec. 8 after debate begins at committee stage on Nov. 25, Parliament speaker Evangelos Meimarakis told lawmakers in Athens today. Prime Minister Antonis Samaras’s coalition government controls 154 seats in the 300-seat legislature.

To contact the reporters on this story: Marcus Bensasson in Athens at mbensasson@bloomberg.net; Christos Ziotis in Athens at cziotis@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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