9th Dec 2023

Greece will not meet deficit targets this year or in 2012

  • Ancient Greek vase painting of Apollo. The finance ministry has conceded it cannot meet its deficit targets (Photo: Fingalo)

The Greek finance ministry on Sunday (2 October) conceded that the government will not be able to meet the deficit reduction targets imposed by the European Union and the International Monetary Fund for this year or next.

The shortfall between spending and revenues will amount to 8.5 percent of GDP in 2011, considerably wider than the 7.6 target set by international lenders.

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In 2012, the government will be able to reduce the deficit to 6.8 percent of GDP, but this figure still comes short of the 6.5 percent demanded by Brussels and Washington.

The news comes as Athens unveiled further details on its plan to trim the public-sector wage bill by placing 30,000 workers into a so-called labour reserve pool. These workers will see their salaries slashed by 40 percent ahead of a presumed dismissal within a year.

Officials from the EU-ECB-IMF troika accepted a plan from finance minister Evangelos Venizelos that the bulk of the workers placed in the scheme be over 60 years old and due to retire within two years, while others will come from a number of state agencies scheduled for merger or shut-down.

The troika inspectors have returned to the Greek capital to complete their assessment of the government’s efforts to meet agreed austerity and structural adjustment targets. If the troika gives the all-clear, eurozone finance ministers and the IMF are expected to release the sixth, €8 billiion tranche of bail-out cash to the country.

EU finance ministers are to gather in Luxembourg on Monday to discuss the eurozone crisis and specifically consider the Greek situation, but it is not expected that any decision on the release of the latest tranche of cash will be taken at the meeting.

Resistance to the austerity measures has widened in recent days, with rolling strikes by transport workers and occupations by staff at seven government ministries. The blockades have made it difficult for the troika inspectors to meet with Greek government officials.

Transport minister Yannis Ragoussis’ meeting with the inspectors had to be delayed and held at a secret location, according to Ana, the Greek press agency, where the minister said the government must not make concessions to those that are protesting.

Greek civil servants block troika from entering finance ministry

Inspectors from the so-called troika of the EU, European Central Bank and the International Monetary Fund returned to Athens on Thursday to review the Greek government’s austerity work, only to find staff from seven key ministries blockading their way.

Greek police protest troika, German and French embassies

The very people who have been charged with protecting the Greek parliament and politicians from furious crowds and who have even been criticised by Amnesty International for their heavy-handedness, the Greek police, have themselves now begun to protest EU-IMF austerity.

Eurozone chiefs: Greece can wait till November

Eurozone finance ministers have kicked down a decision on the delivery of Greece’s latest tranche of bail-out cash, saying that the country can wait until November.

Rehn: Rescue fund leveraging on the table

EU economy commissioner Olli Rehn said on Monday that European finance chiefs are considering different options on how to leverage the eurozone’s multi-billion-euro rescue fund to give it further firepower.

Spain's Nadia Calviño backed to be EIB's first female chief

With less than a month to go before the start of a new leadership of the European Investment Bank, the world's largest multilateral lender, the path seems finally clear for one of the candidates, Spanish finance minister Nadia Calviño.


Is there hope for the EU and eurozone?

While some strengths may have been overlooked recently, leading to a more pessimistic outlook on the EU and the euro area than the truly deserve, are there reasons for optimism?

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