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Greece says it does not foresee fiscal gap this year or next

Greece's Finance Minister Yannis Stournaras waits for the start of an euro zone finance ministers meeting in Brussels July 8, 2013. REUTERS/
Greece's Finance Minister Yannis Stournaras waits for the start of an euro zone finance ministers meeting in Brussels July 8, 2013. REUTERS/

ATHENS (Reuters) - Finance Minister Yannis Stournaras denied on Wednesday that Greece would record a fiscal gap this year and next, saying its EU/IMF bailout program was on track to meet the targets agreed with its international lenders.

A draft report by the European Commission seen by Reuters on Tuesday said Greece risked running up a deficit of up to 0.5 percent of gross domestic product this year and next if it failed to deliver on tax collection reforms, though it added that remedies had since been identified.

"There is no fiscal gap for 2013 or 2014," Stournaras told Reuters.

"The last report presented (by EU/IMF inspectors to Eurogroup) does not say that there is a fiscal gap in 2013 and 2014. If that were the case, there would have been no disbursement of aid."

He said that troika inspectors had concluded that Greece's bailout program was "on track".

Inspectors from the European Union, European Central Bank and International Monetary Fund "troika" completed their latest review of Greece's bailout this week, allowing euro zone finance ministers to approve 6.8 billion euros in aid.

The draft report, dated July 2013, said Greece's fiscal outlook for 2013-14 remained subject to high uncertainty, noting that tax collection was concentrated in the second half of the year.

"Failure to deliver the targeted improvement in collection performance would imply the need to seek alternative measures to close the emerging fiscal gap," it said.

However, the report said authorities had identified measures to address the issue and reach the agreed targets: a primary budget balance - before debt servicing costs - in 2013, and a primary surplus of 1.5 percent of GDP next year.

(This story corrects lead to say "fiscal gap", not "primary budget deficit")

(Reporting by George Georgiopoulos; Editing by Kevin Liffey)

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