European Commission President Jose Barroso praised Greece’s budget-cutting efforts and said the country’s continued membership of the euro area is crucial.
“What Greece has been doing in terms of budgetary adjustment is of a historic nature,” Barroso told a conference Thursday in Brussels. “To have Greece in the euro I think is critically important, not only for Greece but also for the euro area.”
Greece narrowed its budget deficit from more than 15 percent of gross domestic product in 2009 -- five times the European Union limit -- to 9.1 percent in 2011. The spending gap in the country, which is in its fifth year of recession, is due to shrink to about 7 percent of GDP this year.
The Greek government of Prime Minister Antonis Samaras is seeking extra budget savings to qualify for more disbursements of emergency aid from the euro area and International Monetary Fund. Their loan pledges to the country have amounted to 240 billion euros ($309 billion) since 2010.
“We should support Greece,” Barroso said, “provided Greece now respects all the commitments.” [Bloomberg]