Daily Management Review

Legislators of Greece adopted the budget for 2018


Greek lawmakers adopted the country's budget for 2018 by a majority vote. The budget will be the last in the conditions of the rescue program, because of which the country had to live in austerity for eight years.

Legislators of Greece adopted the budget for 2018
"We leave behind a period that no one wants to remember," Prime Minister Alexis Tsipras told lawmakers at the end of a two-day debate in which his ruling coalition was criticized by opposition lawmakers for tax breaks for the population.

"For the first time, we know with certainty that this is the last budget within the assistance program," he added.

Greece relied on financial assistance from the creditors of the European Union and the International Monetary Fund (IMF) since 2010. The third aid program is completed in August 2018.

The economy of Greece has lost about a third of the volume of production over a seven-year period, but now it is gradually returning to growth.

The budget predicts an increase in output by 2.5% in 2018, compared to a projected 1.6% this year. It is expected that it will generate a primary surplus that excludes debt servicing and accounts for 3.82% of gross domestic product - higher than the established creditors.

The financial goals of Greece were approved by the creditors of the European Union and the International Monetary Fund.

According to the latest review of financial assistance, the government agreed to cut costs, reduce pensions, assess the skills and qualifications of public sector employees and sell coal-fired power plants. In addition, trade unions will tighten the rules for strikes.

"Greece is the only European country that is included in the rescue program and has the lowest growth in the euro area... People want this budget to be your government's last budget," said the leader of the opposition New Democracy party, Kyriakos Mitsotakis.

As part of measures to compensate for the effects of austerity, the Ministry of Finance stated that value added tax will not be increased on the five islands to which thousands of refugees arrived, after the migration crisis in Europe broke out in 2015.

Hundreds of thousands of Greeks lost their jobs during the crisis and a deep recession caused by harsh economic measures. The income of pensioners, meanwhile, declined by more than 30%.

Prime Minister Alexis Tsipras came to power in 2015 amid promises to stop austerity. Later, he agreed to join the new financial rescue program for Greece, although he claimed protection of pensioners, wages and workers' rights.

source: reuters.com