Troika: Rewrite the 2014 budget and find 2 billion euros with new measures
Thomas Wieser’s visit in Athens: The 2014 Budget and the new mid-term program will be dealt with until December - Greek Government will not discuss horizontal measures
The draft state budget for 2014 seems to have fallen on deaf ears. The message of the visit by the Euro Working Group Chairman Thomas Wieser to the Finance Ministry and the Prime Minister was that "we will look at all the issues until December," meaning that the numbers and the new measures demanded by Greece’s lenders will be closed along with the 2014 budget and the new mid-term program for 2014-2017.
This way they are threatening to completely change the final draft of the budget in relation to that presented by the Greek government as soon as Thomsen’s group left Athens.
The auditors do not seem in a hurry to return and their next visit is postponed for next week instead of this Friday, October 18. They think they have all the time until the formation of a government in Germany too, in order to raise any reasonable or improbable objection or requirement.
Already Asmussen is pressing for faster privatizations. If the predicted revenues do not come, Troika will press for immediate remedial measures with automatic cuts in wages and pensions and undo what the Greek government has been planning in three ways:
- by discovering a budgetary gap that means new measures of 2 billion euros
- by inflating the fiscal gap in 2014 to 6.5 billion euros, instead of 4 to 4.4 estimated by the Greek government
- by clipping the forecasts for surplus and growth in 2013 and 2014
The Greek government, however, is not discussing new horizontally measures. it is betting a lot on the available data and predicts a much smaller decline (3.5% -3.8% instead of 4% this year) and higher primary surplus (up to 500 million euros instead of 344 that the auditors agreed to at the end).
And if Troika still does not back down in the bazaar that will last until the adoption of the new budget in December, it will have already opened new questions for the next critical audit in March, with requirements for additional measures such as layoffs in the public sector, wage and pension cuts, seizures against state borrowers, faster privatizations, etc.
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