Greece and lenders await budget surplus

ATHENS - Reuters

Teachers hold placards and chant slogans during a protest against job cuts in the northern port city of Thessaloniki, Greece, on Monday, Sept. 23, 2013. AP Photo/Nikolas Giakoumidis

Greece and its lenders are close to agreeing that Greece will achieve a primary budget surplus this year, a senior Finance Ministry official has told reporters after senior Greek and European Union and International Monetary Fund officials met on Sept. 22.

Hitting a primary budget surplus, before interest payments, is key for Greece because it would trigger a clause in its EU/IMF bailout allowing it to seek further debt relief from its lenders.

“I think we are close to converging on a common, realistic estimate that there will be a small, viable primary budget surplus this year,” the official said on condition of anonymity, after the first meeting in the latest review of Greece’s bailout by its lenders.

Troika in Athens

“There are four or five budget items on which we still have to fully agree,” the official added. The latest review by officials from the “troika” of European Union, International Monetary Fund and European Central Bank is expected to last at least until the end of next month.

Athens and its lenders are also very close to agreeing on a joint economic growth forecast for 2013 and 2014, the official said, without revealing the estimates.

Athens said on Thursday that it expected its economy to shrink by 3.8 percent this year, less than a previous estimate of 4.2 percent.

Finance Minister Yannis Stournaras said the economy may have bottomed out after a severe, six-year recession.