Friday, October 18 17:03:16
Greece and its foreign lenders are at loggerheads over the size of the country's budget gap next year, Greek officials said today, prompting talk that Athens might be forced to adopt new austerity measures.
Greece has been kept on a drip feed of EU/IMF rescue loans since 2010 that have come at the price of austerity cuts and the government has repeatedly ruled out imposing painful new measures on a nation now in its sixth year of recession.
But speculation that new measures might be on the horizon resurfaced after European Central Bank policymaker Joerg Asmussen said this week Greece faced a "significant fiscal gap" next year, an assertion that Greek officials deny.
The European Union and International Monetary Fund estimate next year's fiscal gap - or the amount by which Athens is expected to fall short of the budget targets the lenders have set - at 2 billion euros, while Athens expects it to be around 500 million euros, a Greek government official said.
"Until July they did not see a fiscal gap for 2014 but suddenly changed their minds," the official told Reuters, speaking on condition of anonymity.
The lenders' higher estimate is because they projected a higher pension fund deficit than Greece and believe that revenues from tax collection will be lower than expected due to widespread tax evasion, the official said.
The lenders have previously said Greece's fiscal outlook for 2013-14 is subject to high uncertainty, noting that tax collection is concentrated in the second half of the year.
Athens has ruled out across-the-board wage and pension cuts to make up for the shortfall.
A senior finance ministry official said Athens was hopeful of reaching agreement with its lenders on the issue of the 2014 fiscal gap when EU/IMF inspectors resume an inspection visit at the end of the month.
"This is what happens every time," the official said, adding that inspectors would return to Athens at the end of the month as originally planned and not early next week as expected.