Fresh calls made for tougher action
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.