ATHENS (MNI) – Greece’s general government deficit is expected to
retreat to 4.2% of GDP next year from 6.6% this year, if all measures to
be agreed with the European Commission, European Central Bank and
International Monetary Fund — the so-called troika — are implemented,
according to the government’s preliminary 2013 budget, which was
presented to Parliament Monday.

The Greek government has a constitutional obligation to table the
new budget every year on October 1, but the draft presented today is
expected to be heavily revised since Greece is in ongoing negotiations
with its official lenders over deficit-cutting measures expected to
total E13.5 billion.

The troika is disputing or questioning measures worth about E2
billion presented to them today by their Greek counterparts, a top
finance ministry source told journalists after a meeting here. The
source did not specify whether the reservations expressed by the troika
refer to proposed spending cuts or revenue-raising measures.

The troika is scheduled to meet with Greek Prime Minister Antonis
Samaras today at 1500 GMT/1100 ET today.

According to the preliminary budget, Greece’s GDP is expected to
contract by 6.5% this year and will head into a sixth year of recession
in 2013, with the economy projected to shrink another 3.8%.

Deputy finance minister Christos Staikouras, upon tabling the
budget to parliament, predicted that Greece will be able to achieve a
primary surplus of 1.1% of GDP in 2013 “despite the deeper than expected
recession.”

“It is indeed a fact that after our country’s accession into a
bailout program, we have managed a fiscal adjustment of E49 billion, or
22.6% of GDP, in the period 2010-2012. This came with big sacrifices
from the Greek people,” Staikouras said.

“In this difficult period, the government is determined to get out
of the crisis, staying within the Eurozone. With this budget we can see
some first small but positive signs,” he added.

Officials of the troika have returned to Athens to finalize the new
fiscal package, which will lead to their eagerly awaited report
assessing the fiscal and economic situation in Greece. Finance ministers
of the Eurozone will decide, based on the troika report, whether to
disburse Greece’s next bailout loan tranche, for E31.5 billion.

–Athens bureau; apapamiltiadou@marketnews.com

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