Tags: Greece | Austerity | Targets

Greece Needs More Austerity to Hit Targets

Friday, 25 Nov 2011 12:32 PM

Greece's budget deficit will not fall below a key eurozone ceiling by 2014 as planned if the debt-laden country fails to decide additional austerity measures in June, a set of updated budget forecasts revealed on Friday.

Assuming no more measures are taken, Greece's budget deficit will shrink to just 4.2 percent of gross domestic product in 2014 instead of the 1.1 percent assumed under a previous set of forecasts made in June, the finance ministry data showed.

The government also forecast debt as a percentage of GDP would fall to 125.6 percent in 2015 from about 162 percent this year assuming a debt reduction plan under its latest financial rescue agreed in October goes ahead. The bailout is aimed at reducing Greece's debt to 120 percent of GDP by 2020.

The new data are part of the country's updated mid-term fiscal plan for 2012-2015, which was revised to take into account the country's deeper-than-expected recession and a debt cut plan agreed by the country's lenders last month.

"The revised mid-term plan does not take into account the additional fiscal measures that will be finalized and announced in June," a senior finance ministry official told Reuters.

"We stick to the target to reduce the deficit to below 3 percent by 2015," the official added.

Greek Finance Minister Evangelos Venizelos said on Wednesday the country's next government after elections are held early next year will have to specify additional fiscal measures in June.

The front-runner to win the poll, the conservative New Democracy party, has ruled out any fresh austerity measures despite backing the broad fiscal targets.

Greece is struggling through its fourth year of recession and needs the next tranche of funds under a bailout deal if it is to avoid bankruptcy next month.

© 2017 Thomson/Reuters. All rights reserved.

   
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Greece's budget deficit will not fall below a key eurozone ceiling by 2014 as planned if the debt-laden country fails to decide additional austerity measures in June, a set of updated budget forecasts revealed on Friday.Assuming no more measures are taken, Greece's budget...
Greece,Austerity,Targets
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2011-32-25
Friday, 25 Nov 2011 12:32 PM
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