Greek lawmakers to vote on first budget since exiting bailout programs
Today, lawmakers in Athens will vote on next year’s proposed budget—the first since the debt-saddled country exited bailout programs in August.
Although the Greek economy seems to have finally escaped the downward spiral that consumed markets over the past five years, it still lies in a precarious position. Unemployment remains high at 18.6%, and banks continue to be crippled by bad loans.
Additionally, the country’s GDP will likely fall short of its 2.7% growth goal this year due to Athens’ decision to curb spending as part of a deal to secure easier future loan repayments. While reductions in pension payments were originally planned, they were recently cut from the budget after major protests.
While this decision will give relief to working-class Greeks, the planned primary surplus now lies just barely over the benchmark at 3.56%– a rate that it is likely to be maintained until 2022, when Athens’ agreement with its lenders expires. With Greece also struggling to jumpstart its economic growth, watch today’s budget attempt—likely to be passed—to strike a careful balance between financial discipline and fiscal stimulus.
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