Greek MPs Debate Uncertain Budget

Greek Deputy PM Evangelos Venizelos

ATHENS – Without a deal with international lenders, a 2014 budget for Greece that has a big hole in it – the size is disputed – went before Parliament on Dec. 3, leaving lawmakers with some uncertainty over what they would be voting on.

The coalition of Prime Minister Antonis Samaras, the New Democracy Conservative leader and his partner, Deputy PM and PASOK Socialist leader Evangelos Venizelos, have only a four-vote majority in the 300-member body and some of the ruling party MPs have said they won’t support certain measures that put more taxes on sectors they back, such as farmers.

Venizelos also said he won’t go along with allowing the foreclosure of homes for those who can’t afford to pay their mortgages during a crushing economic crisis caused by austerity measures he has supported.

When he was finance minister in a previous government, Venizelos implemented a 100 percent surcharge on property taxes and had it inserted in electric bills under the threat of having power turned off for non-payment but said he’s had enough of that now.

The Parliament is in the difficult position of examining a fiscal blueprint even though the government is still at odds with the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) on a range of delayed reforms.

That is holding up release of a pending one billion euro ($1.37 billion) installment but Greece has enough cash until Spring, when it’s scheduled to start making payments on bonds and loans.

Still, the Parliament is due to vote on the budget on midnight of Dec. 7 even if the government and the Troika haven’t decided on how to fill what could be a gap of as much as 1.5 billion euros ($2.03 billion).

Technically, Greece is also in violation of a new Eurozone rule requiring governments to submit budget drafts to Brussels for approval before they are adopted but the government has already essentially ceded control of its finances to the Troika.

An unnamed official told The Financial Times, however, that, “We don’t see any problem with revising the budget next year, if necessary.”

The biggest stumbling blocks are lifting a ban on home foreclosures, shutting a lossmaking defense industry, introducing a broad-based real estate tax and allowing firings of workers at private companies without mandated compensation, and speeding the pace of public worker firings.

It is the first time in two years that the Greek government has openly opposed bailout measures demanded by the troika. Its increasingly defiant stance toward its creditors in recent weeks has become a source of increasing worry and frustration for EU officials.

Venizelos told a conference in Athens organized by the American-Hellenic Chamber of Commerce (AMCHAM): “We want a real, not just a rhetorical recognition of the sacrifices of the Greek people in the past few years . . . Nothing can justify this new round of friction and foot-dragging with the Troika.” He didn’t mention that he had acceded to their demands until now.

There’s some tension in the coalition as PASOK put the mortgage foreclosure ban in place during a previous administration but Venizelos has voiced occasional objections to more austerity before relenting.

Another key is whether Greece will reach a primary surplus – not counting interest on debt, some military expenditures, the costs of state enterprises and city and town budgets as well as social security.

Greece said if it hits that pinnacle that could trigger debt relief from the Troika but German Chancellor Angela Merkel, whose country foots much of the bailout bill, has ruled that out under any conditions.