Greece awaits EU budget verdict
ATHENS; Debt-hit Greece heads for another grilling by European peers in Brussels this week over its austerity programme in the wake of a general strike and amidst deteriorating recession and jobless figures.
Greek finance minister George Papaconstantinou has to show his EU counterparts in two-day meetings that Athens can enforce draconian cuts whilst fighting a recession and facing angry protests on the streets.
Detailed options for
European-level financial support to help Greece out of
its debt crisis will also be
presented to eurozone finance ministers when they meet on Monday and Tuesday, European sources said. Reports suggest two main proposals will be on the table.
One involves a series of loans by European partner countries, coordinated by the European Commission, the EU’s executive arm, while the other would see the Commission borrow money on markets and extend Greece loans guaranteed by EU states. An internal Commission document quoted by French daily Le Monde said the first option is seen as easier in the short term, but the second is favoured in the long-run. But the latter approach would require the assent of sceptics in Britain and Sweden because the Commission acts for all 27 EU member states, and not just the 16 that share the euro. Papaconstantinou’s briefing comes under Greece’s duties to regularly report its finances after the EU imposed “quasi-permanent” supervision last month in reaction to Athens revealing that it had grossly under-reported its budget figures.
The Socialist government in early March unveiled
a wave of state spending
cuts and tax hikes worth
4.8 billion euros ($6.6 billion) and hopes to save a total of around 15 billion euros this year, according to finance ministry sources.
More cuts are on the way. A new law overhauling the
tax system is expected by
the end of March and legislation to reform pensions and increase the statutory retirement age will come the following month.
But in a report released ahead of the EU finance
Greece admitted recession could force it to take further deficit-cutting steps.