Evangelos Venizelos, finance minister, said in a written statement to parliament that the budget reinforced “a difficult fiscal adjustment effort – transforming a primary deficit of €24 billion in 2009 into a €3.2 billion primary surplus in 2012”. A €5 billion package of tax increases and spending cuts for 2012, on top of €2.1. billion in the fourth quarter, would “correct for slippages” this year, he said. “We have merged the fiscal targets of 2011 with those of 2012 as agreed with the troika in terms of absolute figures.”
But he warned that unless revenue collection improved significantly in the fourth quarter, this year’s deficit could rise by another 0.5 percentage points.
Spending cuts in the budget include a 5.8 per cent overall reduction in wages and pensions next year. The elimination of 30,000 public sector jobs would bring savings of €200 million in 2012, with a further €950 million coming from the launch of a unified payment system for civil servants. Spending on health and welfare would fall by a record 9 per cent.
The draft may be revised before a vote in parliament at the end of October. Any changes would reflect updated economic statistics, such as the final debt and deficit figures for 2010 to be provided by Elstat, the statistical agency, and fresh projections based on third-quarter reporting by the national accounts office.
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