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Greek PM says EU Commission approved Greek budget without pension cuts

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By Reuters
Greek PM says EU Commission approved Greek budget without pension cuts
Newly appointed Greek Foreign Minister and Prime Minister Alexis Tsipras delivers a speech during a hand over ceremony at the Foreign Ministry, in Athens, Greece, October 20, 2018. REUTERS/Costas Baltas   -   Copyright  COSTAS BALTAS(Reuters)

ATHENS (Reuters) – The European Union’s executive has approved Greece’s first post-bailout draft budget without requiring the implementation of legislated pension cuts, the Greek prime minister said on Saturday.

Athens emerged from its final international bailout in August and Prime Minister Alexis Tsipras has pushed to rescind unpopular pension cuts slated for January as part of austerity measures, claiming there is ample fiscal space to do so.

Trailing the conservative opposition in polls, Tsipras is counting on a less austere budget to win over voters next year, when his term expires.

“The European Commission approved the Greek budget without pension cuts after eight years of austerity,” Tsipras said, calling the development a “success”.

There was no immediate comment from the EU’s executive.

The government has argued it does not need to implement the pension cuts agreed with creditors, as it aims to outperform on primary surplus targets for a fifth straight year.

Greece has promised its euro zone lenders and the International Monetary Fund it will achieve a 3.5 percent of GDP primary budget surplus this year, excluding debt servicing outlays.

In its draft 2019 budget it targets a surplus of 4.14 percent of GDP next year. If it does not apply the pension cuts it puts the figure at 3.56 percent.

The draft budget projects economic growth will pick up to 2.5 percent in 2019 from an expected 2.1 percent this year.

The government is now expected to submit its final draft next month and put it on a parliamentary vote in December.

(Reporting by Angeliki Koutantou and Renee Maltezou; Editing by Ros Russell)