Greece to raise taxes to meet EU targets

Greece is set to raise taxes on tobacco and alcohol, as well as value added tax, to meet EU budget targets.

The centre-right government is under strong pressure to slash the country's budget deficit, which reached 6.1 per cent of GDP last year, due inlarge part to the bill for the 2004 Athens Olympics.

Its partners from the eurozone have allowed Athens to take two years to bring the budget below the 3 per cent of GDP ceiling, set by the Stability pact rules.