Parliament passes 2015 budget

The Greek Parliament in a roll call vote held on Sunday midnight approved the 2015 state budget. A total of 155 deputies –from New Democracy, PASOK as well as independent MP Ekaterini Markou – voted for the budget, while 134 deputies voted against it.

After many decades, the country has now a balanced budget, Prime Minister Antonis Samaras said after the conclusion of the debate and the vote. “This is a historical moment,” he said adding this is the only way towards development. 

“The result of the vote shows that the government is a step away from the end,” SYRIZA leader Alexis Tsipras said after the vote. “The sooner the prime minister realizes that so as to turn in an orderly way to the people’s verdict, the better for the country,” he added.

The budget aims for an underlying, primary surplus of 3.0% of GDP from 1.8%-of-GDP now seen for 2014 (lower than 2.3% initial estimates but still comfortably above the 1.5% Troika-set target). 

Including interest expenses and the aforementioned ANFA-SMP revenues, the overall budget stands at a 0.2%-of-GDP deficit.

The budget assumes 2.9% real GDP growth and pencils in higher direct (by EUR0.5bn yoy) and indirect (by EUR1.0bn yoy) taxes despite some mild tax easing (30% cuts in heating oil consumption tax and the so-called ‘solidarity tax’ on personal incomes) as well as further containment (EUR0.5bn yoy) in central government primary expenditure.

That said, the Troika has yet to agree to such fiscal projections, instead pointing to a fiscal gap (required fiscal effort to achieve the target). This will have somehow to be bridged during talks in the ongoing program review.