Greece promised its international lenders to
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Greece's government will submit its 2019 draft budget to parliament on Monday evening, aiming to outperform its primary surplus targets for a fifth year and avoid implementing painful pension cuts agreed with creditors.
Greece emerged from an international bailout in August.
The government has promised its international lenders it will achieve a primary budget surplus, excluding debt servicing outlays, of least 3.5 per cent of economic output up to 2022.
Hinging on its fiscal outpeformance, Athens hopes its eurozone lenders will allow it to skip pension cuts scheduled to kick in next year when the left-right coalition government's term expires.
In its first post-bailout budget, Athens is also expected to project economic growth of about 2.5 per cent next year, Prime Minister Alexis Tsipras said last week. The economy is seen growing by 2.1 per cent this year.
"Today's fiscal environment and the Greek government's intention to proceed with fiscal interventions which will prevent cutting pensions will be reflected in the draft budget," government spokesman Dimitris Tzanakopoulos told reporters.
Tzanakopoulos said talks with the EU Commission on freezing pension cuts were progressing "on good terms".
Solving this issue amicably is crucial as the country is closely monitored by markets and any sign of fiscal deviation may plunge it back into crisis.
"Some common ground will be found with the Commission since it is self-evident that the 3.5 per cent primary surplus can be achieved without implementing the fiscal measure of pension cuts," he said.
In the meantime, the government is likely to submit a draft budget which will include fiscal scenarios rather than clarity on whether it will implement the cuts.
Greece has also promised to hand out a social dividend to those hit hardest during the debt crisis which broke out in 2010. But the exact amount to be spent will be decided after deliberations with the EU Commission, Tzanakopoulos said.
Last month, Prime Minister Alexis Tsipras used a keynote policy speech in the northern city of Thessaloniki to announce a spending spree that he said would help fix the ills of years of belt-tightening and boost growth.
Greece will submit its final 2019 budget in mid-November.
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