Greece yesterday received official endorsement by the European Union’s Economy and Finance Ministers Council (Ecofin) for its two-year program to bring its swollen public deficit from 6.1 percent of GDP to below 3 percent.

Economy Minister Giorgos Alogoskoufis said the program is based on three “tools.” One is the non-substitution of new spending for last year’s Olympic expenses, which will save about 1.6 billion euros, or 1 percent of GDP. Second is “the considerable slowdown in the growth of primary expenses,” that is, efforts to cut public waste; and the third tool is an increase in revenues, which, Alogoskoufis was at pains to stress during the two-day Ecofin session, will largely rely on fighting tax evasion after the recent indirect tax hikes.

These three tools are expected to cut the deficit by about 3 percent of GDP, bringing it close to the target.

Jean-Claude Junker, the current president of Ecofin, said “Greece is making very significant efforts” to reduce its deficit and that the Council considers that no additional measures need to be adopted, although the Greek government must remain vigilant in case this proves necessary.

“The Council considers that on the basis of available information, the decisions adopted by the Greek government are in line with the Council’s recommendations of February 17 according to Article 109, Paragraph 4. As a result, no additional steps regarding the excessive deficit procedure are required at the present phase,” Ecofin said in its official statement.

Economic and Monetary Affairs Commissioner Joaquin Almunia commented that Greece is “resolutely” observing the 2005 budget.

If the projections of the program appear to be falling within targets by the end of 2005, when the government will present to Brussels and its partners the 2006 draft budget, Ecofin will suspend the excessive deficit procedure until the targets are ultimately attained.