Greece to Review Policies to Reduce Deficit - The Best from Greece

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Posted on: 12/Nov/2009

European Union finance ministers will outline a timetable in which Greece needs to lower its budget deficit to below 3 percent of output in February, said Finance Minister Giorgos Papaconstantinou yesterday.

Speaking to reporters at the monthly meeting of European finance ministers (Ecofin) in Brussels, Papaconstantinou said, “There will be a discussion at next month’s Ecofin – but the final decision for the timetable for a reduction of the deficit will be in February, following the Stability and Growth Pact.

“They will also review policies stemming from the budget and structural changes that relate to the deregulation of closed professions.”

The European Commission, the EU’s executive arm, plans to outline timetables today for several countries to reduce their budget deficits to under 3 percent of gross domestic product, the EU limit.

The recent economic downturn, which has cut into tax receipts and driven up spending and subsidies, has driven most of the EU governments’ budgets deeper into the red.

Most of these countries – which are to include the UK, France and Germany – will be given two to four years to comply.

But Greece, which has received numerous previous warnings, will be moved to a second stage in the EU’s so-called excessive deficit procedure, said European Commissioner for Economic and Monetary Affairs Joaquin Almunia.

Greece “has failed to take decisive action” to reduce budget deficits, Almunia told reporters.

In a draft 2010 budget unveiled last week, Papaconstantinou outlined a plan to reduce the budget deficit to 9.4 percent of GDP next year – from a sharply revised estimate of 12.7 percent this year – through a combined 7.8 billion euros in spending cuts and new taxes.

Greece has also pledged to work for more accurate fiscal accounting and forecasting, after senior EU officials reacted angrily to revised data that showed deeper-than-expected budget shortfalls.



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