Gov't to leave pension cuts out of budget draft

While Italy's decision to ignore the European Union's budget deficit cap had an immediate negative impact on Greek bond yields on Friday - showing that Greece remains vulnerable to all crises - the government in Athens was seeking a way to express its decision not to reduce pensions in January without inciting the wrath of its creditors in the first budget draft on Monday.

"The budget draft will reflect the government's intention not to slash pensions," said a government source. How this can be achieved will be the subject of consultations throughout this weekend, with a source saying that the draft will neither include the reduction of the pensions nor the offsetting measures (aimed at boosting growth) in the hope that the latter would ease creditors' concerns.

In any case the European Commission is expecting the budget version that Athens will send to Brussels on...