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Greece Presents 2016 Budget and Revamps Recession Prediction Greece Presents 2016 Budget and Revamps Recession Prediction
(35 minutes later)
ATHENS — Greece on Friday presented an optimistic budget for 2016, predicting a recession milder than expected in previous forecasts. ATHENS — Greece on Friday presented an optimistic budget for 2016, predicting a recession milder than expected in previous forecasts.
The government also said that final numbers for 2015 would indicate the economy will have been flat for the full year, rather than the deep contraction of 2.3 percent that had been expected. One reason is that the capital controls the government imposed on banks over the summer were less damaging to the Greek economy than had been feared.The government also said that final numbers for 2015 would indicate the economy will have been flat for the full year, rather than the deep contraction of 2.3 percent that had been expected. One reason is that the capital controls the government imposed on banks over the summer were less damaging to the Greek economy than had been feared.
And next year, the government said, the economy will shrink by only 0.7 percent as it continues carrying out cost cuts required by its 86-billion-euro, or $92 billion, international bailout package. As recently as last month, the government had predicted an economic contraction of 1.3 percent in 2016. And next year, the government said, the economy will shrink by only 0.7 percent as it continues carrying out cost cuts required by its 86 billion euro, or $92 billion, international bailout package. As recently as last month, the government had predicted an economic contraction of 1.3 percent in 2016.
The new assessment came as the finance minister, Euclid Tsakalotos, on Friday presented the budget to Parliament, which is to vote on the package early next month. Also on Friday, the finance minister, Euclid Tsakalotos, presented the budget to Parliament, which is to vote on the package early next month.
“The Greek economy endured, disproving disaster scenarios,” according to a statement by the finance ministry that accompanied the budget.“The Greek economy endured, disproving disaster scenarios,” according to a statement by the finance ministry that accompanied the budget.
The budget outlined a total of €5.7 billion in additional spending cuts and tax increases — with 1.5 billion of that still to come this year and the remaining 4.2 billion euros set for 2016. Some of the economic changes detailed in the document, including increases to taxes on farmers, have yet to be approved by the Greek Parliament. The budget outlined a total of €5.7 billion in additional spending cuts and tax increases — with €1.5 billion of that still to come this year and the remaining €4.2 billion set for 2016. Some of the economic changes detailed in the document, including increases to taxes on farmers, have yet to be approved by the Greek Parliament.
On Thursday, lawmakers narrowly passed a package of economic changes required by international creditors to unlock up to €12 billion in loan money from the bailout program.On Thursday, lawmakers narrowly passed a package of economic changes required by international creditors to unlock up to €12 billion in loan money from the bailout program.
The package, which includes a narrowing of the pool of home mortgage holders protected from foreclosure, and a new tax on gambling and wine, passed as expected. But it came at a political cost. Two legislators belonging to the coalition government, who refused to support to the bill, were ousted from their political parties. That reduced the government’s majority in the 300-member Parliament to a precariously thin margin of only three seats.The package, which includes a narrowing of the pool of home mortgage holders protected from foreclosure, and a new tax on gambling and wine, passed as expected. But it came at a political cost. Two legislators belonging to the coalition government, who refused to support to the bill, were ousted from their political parties. That reduced the government’s majority in the 300-member Parliament to a precariously thin margin of only three seats.
The defections were a sign of the challenge that the leftist prime minister Alexis Tsipras faces in maintaining unity in his coalition, while honoring the terms of the country’s bailout — its third international rescue since 2010.The defections were a sign of the challenge that the leftist prime minister Alexis Tsipras faces in maintaining unity in his coalition, while honoring the terms of the country’s bailout — its third international rescue since 2010.
Also Friday, the Eurogroup Working Group reached “a broad agreement” on measures, including those to shore up Greece’s financial sector, said Michel Reijns, the spokesman for Jeroen Dijsselbloem, the head of the Eurogroup. “Some further details need to be clarified, and the final agreement probably will be communicated tomorrow,” he said. Also Friday, the Eurogroup Working Group said that it had reached “a broad agreement” on measures, including those to shore up Greece’s financial sector. “Some further details need to be clarified, and the final agreement probably will be communicated tomorrow,” said Michel Reijns, the spokesman for Jeroen Dijsselbloem, the head of the Eurogroup.