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Greece Budget Pits Optimists Against Creditors

Greece Budget Pits Optimists Against Creditors  Greece Budget Pits Optimists Against Creditors

The Greek parliament early Monday adopted a budget for 2015 that was a victory for politicians ready to celebrate the glimmer of returned growth over warnings from international creditors that such a move may be premature.

The budget, which forecast 2.9 percent growth and a deficit of 0.2 percent, was passed by 155 votes for and 134 against after a late-night session, AFP reported.

However, Greece’s “troika” of creditors – the European Commission, European Central Bank, and International Monetary Fund – had regarded those estimates as overly optimistic for an economy that shrank by 25 percent since 2008, and had urged Athens to hold the line.

Greece’s creditors have said that the country’s deficit will be closer to 3.0 percent of GDP, and warned against proposed tax cuts when Athens will need to find an additional 3 billion euros ($3.69 billion) in revenue just to meet its financial targets.

With Greece awaiting delivery of 1.8 billion euros ($2.21 billion) in additional loans from creditors, the government of Prime Minister Antonis Samaras had been wary of crossing troika members who have already extended Athens 240 billion euros ($294.8 billion) in bailout funds since 2010.

“I am confident that we will soon arrive at an agreement” with the troika, Finance Minister Ghikas Hardouvelis told the assembly. “Our differences with the calculations of the troika are much reduced,” he said, echoing comments by Samaras.

The budget vote came as Athens was assessing the damage Sunday after a night of protests that degenerated into violence on the sixth anniversary of the police killing of a teenager, with nearly 300 people arrested.

Financialtribune.com