Greece Revises Debt Forecasts Up In Draft Budget
Finance ministers from the other 16 countries that use the euro said after a telephone conference Wednesday that they hope to decide on Nov. 12 whether to give Greece its next bailout installment, provided the country agrees to the reforms.
German Finance Minister Wolfgang Schaeuble, however, warned it was unlikely for that deadline to be met since the German Parliament would have to vote on the issue.
Everything will ultimately hinge on a report by Greece's debt inspectors from the European Central Bank, European Commission and International Monetary Fund, collectively known as the troika, on the state of Greece's compliance with its bailout terms.
A delay in disbursing the funds would threaten to leave Greece without rescue financing after Nov 16, when its money runs out. The country could finance itself temporarily by issuing short-term debt, as it has done in the past, but it would not be able to do so for more than a few weeks since it pays very high rates to raise money in bond markets.The strain in the governing coalition was evident in a Parliamentary vote Wednesday on a bill to allow the government to privatize public utilities. The bill passed by majority, but lawmakers from the two junior coalition partners voted against certain articles. Finance Minister Yannis Stournaras submitted the revised budget to Parliament Wednesday. The deputy finance minister, however, canceled a scheduled presentation of the budget due to a 24-hour journalists' strike to protest austerity measures. The revised figures highlight the country's monumental struggle in turning around its public finances. Government debt is projected to rise to 189.1 percent of gross domestic product in 2013, above the 182.5 percent predicted in the preliminary draft submitted at the start of October, and up from the 175.6 percent forecast for this year. The deficit is now projected at 5.2 percent of GDP in 2013, up from 4.2 percent predicted in the preliminary draft of the budget â¿¿ but still an improvement from the 6.6 percent predicted for this year.
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