A cabinet meeting on Sunday night ratified the draft state budget for 2012, which was presented by government Vice President and Finance Minister Evangelos Venizelos. The draft budget will be tabled at the Permanent Parliamentary Economic Affairs Committee on Monday, according to the provisions of article 79 of the Constitution.
The budget's main fiscal indexes for 2012, as well as the point where the budget for 2011 will close, were discussed at length with the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) 'troika', both before and after its arrival in Athens.
The draft budget, according to an announcement by the Finance ministry, as against a fiscal target of 2011 of a 17.1 billion euros deficit, meaning 7.8 percent of the current GDP, the deficit for 2011 is determined at 8.5 percent of the GDP (18.69 billion euros), in other words a deviation of 0.7 percent of GDP is being recorded, due to recession (-5.5 percent) that is much deeper than that predicted in May (-3.8 percent), when the Medium-Term Fiscal Strategy Programme was prepared.
As has been agreed with the "troika", from the combined approach of the targets of 2011 and 2012, in the framework of the Medium-Term Fiscal Strategy Programme, achieving the fiscal target for 2012 (deficit of 6.8 percent of GDP or 14.65 bilion euros) is secured.
This amount of the total fiscal deficit (including the cost of serving the public debt) in 2012, permits the production of a first stage surplus of 3.2 billion euros or 1.5 percent of GDP, that signals Greece's entry into a different fiscal phase.
Since three crucial months remain for the completion of the 2011 fiscal year, the final assessment of a deficit of 8.5 percent of GDP can be achieved, provided there is a similar response by the state mechanism and the citizens themselves, on whose stance the country's fiscal, developmental and social future depends, according to the finance ministry's announcement.
With the implementation of the measures that have already beed decided, the achievement of the fiscal target of 2012 is secured, one way or another, since both years (2011/2012) are jointly handled.
With the budget for 2012 and its implementation, a fiscal adjustment is recorded that began with a first stage deficit of 24 billion euros in 2009 (fiscal deficit of 36 billion euros) and reaches a first stage surplus of 3.2 billion euros only three years later, in 2012, despite the increase in the annual cost of serving the public debt. The achievement of first stage surpluses shields the country, thanks to the sacrifices and the efforts of the Greek people, the announcement added.