On Tuesday, the parliament of Greece approved the budget for 2018, dubbed by the government as the last under the multi-billion bailout of the country, which nominally closes in August.
Prime Minister Alexis Tsipras informed the chamber: “After eight years…this is the final bailout budget parliament is called to approve. We leave behind a period nobody will want to remember.
“We have regained credibility in managing public funds.”
The Greek finance ministry is keeping high taxation with the goal of collecting a budget surplus that is equivalent to 3.8 percent of the gross domestic product (GDP), not including debt payments in 2018.
The economy is also expected to improve by 2.5 percent, as compared to 1.6 percent for 2017.
Panos Kammenos, the defence minister and government coalition partner, stated: “This is the first budget of normality in the past seven years.
“There will be no more bargaining for (bailout) loan tranches.”
Last month, the ministry said that enough “fiscal room” was achieved in order to allow tax cuts after 2018 when the country is set to exit its third multi-billion EU-backed bailout.
The government has already passed pension and tax break cuts into law that will take effect even after the country exits the bailout, in 2019 and 2020.
Pierre Moscovici, the EU economic affairs chief, has also stated that Greece will stay under fiscal supervision until it repays 75 percent of its loans from the European Union.
“There are tight restrictions until at least 2022,” stated Kyriakos Mitsotakis, the main opposition leader. “Greeks hope this will be the last budget by your government.”
The country is now eager to take advantage of an increasing appetite for Greek debt, with the nation’s 10-year bond yields hovering at pre-crisis levels lately.
For the first time since 2006, the 10-year bond yields dropped below 4.0 percent last week, and five-year bonds are about 3.5 percent.
Dimitris Tzanakopoulos, the government spokesperson stated: “This means that independently accessing the markets and regaining the country’s economic and political sovereignty is not just fantasy, it’s a goal fully within our reach.”
According to reports, Greece projects at least two bond offerings in the first half next year.