The closely watched Greek draft budget for 2019 was delivered to the EU Commission on Monday, with the highlights being a primary budget surplus of 3.6 percent of GDP and "fiscal space" of 1.1 billion euros to implement various "discretionary measures" previously announced by the Tsipras government as accompanying the new austerity measures.
Based on the "best-case scenario" whereby the poll-trailing government receives creditors' nod to suspend pre-legislated pension cuts, set for January 2019, then a smaller package of social spending and tax breaks will be implemented.
Greek Prime Minister Alexis Tsipras, who faces a general election next year with his hard leftist SYRIZA party trailing the main opposition and his own personal approval ratings sagging, had announced a series of relief measures while speaking at a Thessaloniki trade exhibition in early September, especially tax breaks to somewhat rollback a "tax tsunami" unleashed in the country in 2016 to meet even higher fiscal targets agreed to with institutional creditors.
Higher welfare spending, such as rent subsidies for lower-income families, permanent status for thousands of special education teachers and in-home care-givers, slightly lower VAT rates, a lower corporate tax rate and social security contributions were also cited in the draft budget, although reduced from initial projections to reflect less fiscal space from the non-implementation of the pension cuts measure.
