Greece on track with EU/IMF fiscal programme: Greek FM | business | Hindustan Times
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Greece on track with EU/IMF fiscal programme: Greek FM

business Updated: Jun 13, 2010 15:22 IST

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Greece is on track with its fiscal programme to slash deficits and debt and will not need more austerity measures as long as goals are being met, the country's finance minister has said.

Greece is scrambling to shore up its public finances and meet tough fiscal targets agreed with the International Monetary Fund (IMF) and its euro zone partners in exchange for a 110 billion euro ($133 billion) emergency funding package to avoid default.

"Additional measures will not be needed as long as the programme is being implemented within the timetables that have been set and as long targets are met," Finance Minister George Papaconstantinou said in an interview with Realnews, a Sunday newspaper.

"Right now we are on track ... the budget shows a deficit that is about 40 per cent lower than last year's, within targets. We are progressing well and as long as we keep this pace up there is no need to worry," he said.

Although Greece's deepening recession is making it harder to grow revenues, cuts in state spending have helped Athens shrink the budget gap by 38.8 per cent year-on-year versus a targeted decrease of 35.1 per cent.

Under the EU/IMF fiscal plan, Greece is aiming to shrink its budget deficit by 5.5 per centage points to 8.1 per cent of gross domestic product (GDP) this year and bring it under the EU's 3 per cent cap by 2014.

Papaconstantinou reiterated the socialist government was not considering any type of debt restructuring because the financial backstop it has secured will cover Greece's borrowing needs in the next years.

"We are not considering this option at all because it would be a mistake. All those who talk about debt restructuring misjudge the benefits of the programme as regards the economy's capacity to grow and the pledge of all parties -- Greece, EU, IMF -- to implement the programme as is," he said.

Papaconstantinou also said the government was not weighing the political cost in its efforts to restore fiscal health and set the economy on a path to recovery.

"We have a strong four-year mandate and we are moving ahead with this in mind, staying away from micropolitical calculations," he said.

With most Greeks expecting the economy to worsen as a result of austerity policies, the government has seen its approval rating come down, according to the latest opinion polls.

Still, the ruling socialists would get 45 per cent of the vote if elections were held.