Greece Sees Recovery Coming in 2014

ATHENS, Greece (AP) — Greece’s battered economy is expected to emerge from its deep recession and grow slightly next year, the Deputy Finance Minister said on Nov. 21, moments after the 2014 draft budget was submitted to Parliament.

Greece’s economy is contracting for a sixth year and the government has been dependent on international rescue loans since May 2010, after rising interest rates left it unable to borrow from bond markets.

The 2014 budget projects economic growth of 0.6 percent next year. This year, the economy is expected to contract 4 percent, slightly less than the originally forecast 4.5 percent, Deputy Finance Minister Christos Staikouras said.

“For the first time, the major sacrifices made by the Greek people are paying off, with the first signs of recovery this year,” he said. “The conditions are being created for Greece’s return to international markets within 2014.”

Unemployment continues to remain high, with the draft budget projecting it to stand at 25.5 percent this year, dropping only marginally to 24.5 percent next year.

Moments earlier, Finance Minister Yannis Stournaras submitted the draft budget to Parliament. It is scheduled to be voted on in early December. It has not, however, been given a final seal of approval by Greece’s international creditors.

Officials from the International Monetary Fund, European Commission and European Central Bank — collectively known as the Troika — have been holding talks in Athens on what measures the government must take next year to meet its bailout requirements.

They remain at odds with the government over a series of measures, including home foreclosures. They were leaving the country on Nov. 21, and are to return next month. “Good progress has been made, but a few issues remain outstanding,” the three organizations said in a joint statement.

In return for its rescue loans, Greece has had to drastically reform its finances and impose a series of austerity measures, including repeatedly slashing pensions and salaries and imposing new taxes.

Staikouras said the economy is expected to show a slight primary surplus — the budget balance without taking into account outstanding interest payments — of 812 million euros ($1.1 billion) at the end of this year, increasing to 3 billion euros, or 1.6 percent of GDP, next year.