Fresh calls made for tougher ac­tion

Kathimerini English - - Business & Finance -

Greece must take ad­di­tional steps to con­sol­i­date its pub­lic fi­nances this year be­cause the coun­try is miss­ing its deficit re­duc­tion tar­gets, the Euro­pean Union’s Eco­nomic and Mon­e­tary Af­fairs Com­mis­sioner Olli Rehn said yes­ter­day.

Greece is strug­gling to put its pub­lic fi­nances in or­der un­der a joint EU and In­ter­na­tional Mon­e­tary Fund bailout pro­gram un­der which Athens will get emer­gency loans of 110 bil­lion eu­ros over three years.

In re­turn for the loans, Greece has com­mit­ted to bring its bud­get deficit down to 7.6 per­cent of gross do­mes­tic prod­uct this year, 6.5 per­cent in 2012, 4.9 per­cent in 2013 and 2.6 per­cent in 2014.

“Be­cause of weaker-than-ex­pected growth last year, plus some fis­cal slip­pages, there is a need to take ad­di­tional mea­sures in fis­cal con­sol­i­da­tion this year,” Rehn told a news con­fer­ence. “How much will de­pend on the as­sess­ment of our mis­sion cur­rently in Athens. Yes, def­i­nitely there is a need to take fur­ther con­sol­i­da­tion mea­sures,” he added.

The mis­sion, which com­prises rep­re­sen­ta­tives from the IMF, the Euro­pean Cen­tral Bank and the Euro­pean Com­mis­sion, is likely to fin­ish work next week. It is also con­duct­ing an anal­y­sis of Greek debt sus­tain­abil­ity, with debts fore­cast to rise to more than 160 per­cent of GDP next year.

Mean­while, Euro­pean Cen­tral Bank Gov­ern­ing Coun­cil mem­ber Ewald Nowotny was quoted as say­ing yes­ter­day that Greece seems not to have been meet­ing the terms of its in­ter­na­tional res­cue pack­age re­cently. “Greece has ap­par­ently not ful­filled the con­di­tions suf­fi­ciently of late. The is­sue of pri­va­ti­za­tions will be the most sen­si­tive point here,” Aus­tria’s Kro­nen Zeitung quoted him as say­ing.

It ap­peared to be the first pub­lic con­fir­ma­tion that a joint in­spec­tion team from the ECB, the Com­mis­sion and the IMF cur­rently in Athens has found short­com­ings in Greece’s im­ple­men­ta­tion of its bailout pro­gram.

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