BUSINESS

Disappointing signs on deficit

By Sotiris Nikas

Greece?s creditors are eagerly anticipating the first firm figures from the Finance Ministry on the impact of measures implemented to battle the recession, although the early signs are disappointing, with the size of the 2011 budget deficit ranging between 9.5 and 10.7 percent.

The failure to contain the deficit even to the revised target of 9 percent of gross domestic product signifies the urgent need for yet more measures, starting from 2 billion euros and rising according to the level of the 2011 deficit.

The possible measures include the curtailing of auxiliary pensions, new cuts to public sector salaries, a more aggressive policy for the closure of state bodies deemed ineffective, direct dismissals (since the labor reserve system has not borne fruit), immediate cuts to social and welfare benefits amounting to some 14 billion euros per year, a further decline in pharmaceutical and medical expenditure, cuts to defense spending and slashing more tax exemptions.

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