Tags: EU | Greece | Financial | Crisis

Greece Says Deficit Goals On Target So Far

Friday, 12 Mar 2010 10:13 AM


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Greece said Friday it exceeded its deficit-cutting targets in January and February, ahead of a key fiscal assessment next week by the European Commission.

The Finance Ministry said that through spending reductions and tax revenue increases it had limited the budget shortfall to 903 million euros ($1.2 billion) in January and February — down 77 percent from 3.9 billion euros in the first two months of 2009.

Last week, the government toughened its austerity measures, with wage cuts and tax hikes worth an extra 4.8 billion euros ($6.5 billion) in savings, in an effort to ease a debt crisis that has unsettled the euro currency and markets globally.

The EU Commission is receiving help from the European Central Bank and International Monetary Fund to monitor Greece's economy, and has set a March 16 deadline to show improved finances.

Athens has pledged to slash its budget deficit from an estimated 12.7 percent of gross domestic product in 2009 to 8.7 percent this year — cutting the annual shortfall from 30.9 billion euros ($42.2 billion) to 22.5 billion euros.

Development Minister Louka Katseli said the additional cuts meant that recession in 2010 would be worse than the official estimate of a 0.3 percent contraction of gross domestic product.

In a Greek television interview Tuesday, Katseli predicting a "steady recovery from 2011 onwards."

The government has said it expects the economy to expand by 1.5 percent next year, a target also announced before the latest austerity measures.

Meanwhile, official data released Friday showed that Greece's economy was still shrinking and unemployment remained above 10 percent at the end of 2009 — snapshot of the economy before the government announced the spending cuts that are expected to hit the country hard.

The National Statistics Agency said the economy contracted by 2.5 percent in the fourth quarter and that the jobless rate was 10.2 percent in December. That rate is down slightly from 10.6 in November but up from 8.9 percent a year earlier.

It said 505,110 people were recorded as being out of work in December out of a total population of about 11 million.

Greece's main labor unions held a second 24-hour general strike in a week Thursday to protest the austerity measures. The action halted flights and services, while police again clashed with violent demonstrators during anti-government rallies in central Athens.

On Friday, the leader of Greece's powerful civil servants union, ADEDY, said he had asked the government to delay negotiations to reform the country's troubled pension system, warning that the pressing need for fiscal improvement could lead to an "annihilation of pension rights for workers."

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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