Greek 2019 draft budget includes two pension scenarios

Greece's 2019 draft budget submitted by the finance ministry to Parliament on Monday evening includes two different scenarios on the country's fiscal forecasts, depending on whether the agreed pension cuts will be implemented next year.

The government is trying to convinve its creditors the reform is unnecessary, pointing to the country's overperformance in its primary surplus target, but Athens is also eager to show that it is not backsliding on agreed measures.

Based on the draft, the country's primary budget surplus target will reach 3.56 percent of GDP if the pension cuts are not implemented and 4.14 percent if they are.

The draft also forecasts a 2.1 percent economic growth for the current year and sets a target for 2.5 percent for 2019, the finance ministry said in a press release.

“The draft of the state budget reflects also the government's intention not to implement the pension and balancing interventions, as these were included in the Medium-Term Fiscal Strategy 2019-22 for 2019, with the exception of the measure for strengthening family benefits, which is already being implemented as of January 2018,” it said.

Greece's fiscal budget will be finalized in November, after the European Union reviews the budgets of EU member-states.

Commenting on the two pension scenarios at the end of the Eurogroup meeting on Monday, the head of the European Stability Mechanism Klaus Regling said “it is positive” that Greece presented them.

Regling said that, as talks with Greece's creditors continue, it is “good” to have both possibilities open and “leave the decision to the institutions.”