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Greek gov't submits draft 2012 austerity budget

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Greece's new national unity government has submitted a draft austerity budget for 20-12 to the parliament. The government has predicted that its budget deficit will fall sharply next year, helped by a bond write-down. It has also insisted that no fresh austerity measures will be needed to plug a hole in public finances.

It's the first major task of Greece's new national unity government.

Greek Prime Minister Lucas Papademos

Submitting the country's draft 2012 austerity budget to meet the terms of an international bailout to avoid bankruptcy.

The new government is aiming for a primary surplus next year - that's when the cost of debt maintenance is excluded.

Finance Minister Evangelos Venizelos said, "The 2012 budget can, under certain terms and conditions - if we are serious, united and reliable - be the budget that will begin to turn things around for this country."

Assuming a planned debt swap goes ahead - whereby private stakeholders accept losses on their debt holdings of 50 per cent - Greece is forecasting a budget deficit next year of 5.4 per cent of GDP.

If the debt swap doesn't go ahead, the deficit is expected to hit 6.7 per cent, and Greece's debt load will hit almost 200 per cent of GDP.

Venizelos also said there would be no new tax hikes, wage or pension cuts, if measures passed by the previous government are carried out.

They already include tackling tax evasion, selling off public companies and laying off public sector workers.

Lawmakers will begin debating the draft budget next week.