Greek Prime Minister Antonis Samaras said any budget hole over the coming years would be smaller than projected, playing down estimates by the country's foreign lenders. Greece's European Union and International Monetary Fund lenders predict the country faces a fiscal gap - or a shortfall compared to budget targets - of around 2 percent of GDP or about 4 billion euros over 2015-2016.
"What you hear every so often about a 'fiscal gap' in the coming years are predictions based on working hypotheses," Samaras was quoted as saying in an interview with Ta Nea newspaper, published on Saturday. "Usually, the size ends up being much smaller than what it started out as and after some corrective moves, it is eliminated," he said. Samaras's finance minister, Yannis Stournaras, suggested this week that avoiding a budget hole altogether over that two-year period was possible - the first Greek official to do so.
In an interview with Reuters, Stournaras said Athens' own forecasts, when updated in the autumn, may show that there is no such gap to fill. Avoiding a budget gap would be a major boost for the government. Given Athens is loath to usher in more austerity, discussions in autumn on how to bridge the gap are expected to be the next big test for Samaras's shaky coalition.
Greek officials have said any gap would be covered through reforms and not by piling more austerity on a public already worn down by three years of cuts to wages and pensions as well as tax rises. "There will not be any new, restrictive measures," Samaras told Ta Nea. "There are conditions for an economic recovery which, if we stay on the right path, is not far away." Samaras's fragile government almost collapsed last month over the abrupt closure of state broadcaster ERT to save money, prompting a junior partner to quit the government in protest and feeding fears of snap elections.
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