Financial Times
October 3, 2011
Greece has unveiled a draft budget for 2012 that aims to compensate for a higher than projected deficit this year and create a primary surplus as agreed with international lenders.
This year’s deficit projection has been revised upwards to 8.5 per cent of gross domestic product against a target of 7.6 per cent of GDP, mainly because of a deeper than forecast recession and weak revenue collection.
Evangelos Venizelos, finance minister, said in a written statement to parliament that the budget reinforced “a difficult fiscal adjustment effort – transforming a primary deficit of €24bn in 2009 into a €3.2bn primary surplus in 2012”.
A €5bn package of tax increases and spending cuts for 2012 on top of €2.1.bn in the fourth quarter would “correct for slippages” this year, he said.
“We have merged the fiscal targets of 2011 with those of 2012 as agreed with the troika [experts from the European Union and International Monetary Fund] in terms of absolute figures,” Mr Venizelos said.
But he warned on Monday that unless revenue collection improved significantly in the fourth quarter, this year’s deficit could rise by another 0.5 percentage points.
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