Greece sees end of recession in 2014 with new budget

Athens protesters Greece's attempts to cut the public sector wage bill has been fiercely resisted

Greek lawmakers have passed the 2014 budget, which predicts a return to growth after six straight years of painful recession.

"This is the first decisive step in exiting the bailout," Prime Minister Antonis Samaras said.

Greece's economy has shrunk by nearly one-third since 2007. The budget predicts it will contract less than expected in 2013.

But the OECD says the Greek economy will shrink for another year in 2014.

Greece's 2014 budget forecasts 0.6% growth in 2014.

Mr Samaras said his government had exceeded four of five major targets it had set for 2013 - failing to bring down unemployment, which is around 27%.

The OECD group of developed economies forecasts a 0.4% contraction next year and says Greece's debt would not fall below 160% of GDP before 2020.

Some workers in shipyards have not been paid for almost two years

Since 2010, Greece has received rescue loans and in return, it has pledged to cut its debt and implement economic reforms.

Those reforms, especially to the public sector, have been slow and met with often-violent street protests, leading to exasperation from its creditors.

Jeroen Dijsselbloem, the head of the Eurogroup, said recently that "many finance ministers of the eurozone are starting to lose patience".

The bailout lenders - the eurozone, the IMF and the European Central Bank - have disputed some of the Greek government's figures, arguing that further spending cuts are needed.

Talks with delegations from the IMF and European Commission over the next round of bailout funding have been delayed and will now take place in January instead of next week.

"Technical discussions are expected to continue in Athens next week. We expect a full negotiating team to return to Athens in January, after the authorities have made further progress in implementation, with the objective of reaching a staff level agreement," an IMF spokeswoman said.

More on This Story

From other news sites

* May require registration or subscription

More Business stories

RSS

Business Live

  1.  
    07:42: Lloyds Banking Group
    Lloyds logo

    How much in total has the PPI scandal cost the bank in the past few years? An truly extraordinary £12bn. Not all of that is compensation. The administrative costs of sorting out the payments has been expensive too.

     
  2.  
    07:30: IAG results
    British Airways planes

    IAG raised its 2015 profit forecast by over 20% to 2.2bn euros for 2015, compared to the 1.8 billion euros it had said it was targeting. It says it has been helped by lower fuel costs. It expects to increase its capacity as well.

     
  3.  
    07:27: Lloyds Banking Group

    The bank has had to set aside another £2.2bn to cover the continued cost of repaying customers who were mis-sold payment protection insurance (PPI). That was on top of the £3.1bn the year before.

     
  4.  
    07:21: Lloyds Banking Group
    Antonio Horta-Osorio

    The massive payment to chief executive Antonio Horta-Osorio includes £1m in basic pay and an £800,000 bonus. The rest of the £11m comes from the payout of a "long term incentive plan" which gives him shares in the bank as a reward for steering it out of near insolvency.

     
  5.  
    07:19: IAG results

    Meanwhile, IAG's operating profit for the year to 31 December 2014 is £1.03bn, a 95.3% jump on the previous year.

     
  6.  
    07:15: Via Twitter Kamal Ahmed BBC business editor

    tweets: Breaking: Lloyds CEO Antonio Horta-Osorio total remuneration package will total £11m after shares rise by 193% since 2012.

     
  7.  
    07:10: IAG results

    British Airways owner IAG made a profit before tax from continuing operations of £828m, it says.

     
  8.  
    07:06: Lloyds Banking Group

    The dividend will be 0.75p per share, totalling £535m, which will go to three million shareholders. And that means £130m goes to the government.

     
  9.  
    07:02: Lloyds Banking Group

    The annual results are out. It has announced pre-tax profits of £1.8bn - up from £415m a year ago - and will indeed resume paying a dividend to shareholders.

     
  10.  
    06:50: Lloyds Banking Group BBC Radio 4

    William Wright of capital markets think-tank New Financial tells the Today programme that it was turning out to be a turbulent week for banks: "We've seen continued tax scandals at HSBC, continued restructuring at RBS, all change at the top of Standard Chartered - next week no doubt with Barclays we are going to see more restructuring."

     
  11.  
    06:41: Rising rents
    Houses

    Demand for rental properties is still driving up rents in the private sector. So says Sequence, a network of 300 letting agencies. It reckons that the average monthly rent outside London rose by 5% in the past year - and in London by 7%. "Large cities in particular are seeing a lot of activity as employment increases," it says.

     
  12.  
    06:28: Lloyds Banking Group Radio 5 live
    Lloyds Bank bank branch

    Lloyds is expected to announce profits of around £2bn, but banking analyst Alex Potter tells Wake Up to Money that the dividend resuming is the real indicator for a return to health. "Actually, an awful lot of [investment] funds haven't been able to buy Lloyds shares at all while they haven't been paying a dividend, so, actually just the allowance of those potential shareholders onto the [share] register again is going to be a pretty good thing."

     
  13.  
    06:19: Pension tax relief

    Will Labour suggest cutting pension tax relief for high earners? It seems this may be proposed by Ed Miliband when he speaks later today on how Labour might cut university tuition fees.

     
  14.  
    06:09: IAG results Radio 5 live
    British Airways plane

    We should look forward to hearing strong results for British Airways owner IAG, according to aviation consultant John Strickland. "We should expect to hear a big jump in profitability", he says on Wake up to Money, because the firm is "in a very solid state".

     
  15.  
    06:00: Ian Pollock Business reporter, BBC News

    Good morning. It's Friday. Always a good day as far as I'm concerned. Oh, and the Land Registry's house price figures for England and Wales will be out later this morning.

     
  16.  
    06:00: Good morning Tom Espiner Business reporter

    Some interesting stories coming up today. Expect full year results from Lloyds Banking Group, which is expected to resume paying a dividend to shareholders for the first time since the financial crisis in 2008. British Airways owner IAG is to post its full year results too.

     

Features

From BBC Capital

Programmes

  • TomatoesClick Watch

    The smart garden that fits inside your house and provides fresh healthy food

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.