Deficit goals on course

BERLIN (Reuters) – Greece is committed to reaching a balanced budget by 2010 as agreed with other eurozone countries, but will not lower its deficit target for 2007, Finance Minister Giorgos Alogoskoufis said on Saturday. Greece, which brought its deficit to below the European Union’s 3 percent of GDP ceiling in 2006, is targeting a 2007 drop in its deficit to 2.4 percent from 2.6 percent. Asked if he would lower the target after Friday’s decision by finance ministers to accelerate deficit reduction because of healthy economic growth in the region, Alogoskoufis replied, «For this year, no, we have a budget approved by Parliament.» Speaking to reporters at the gathering of finance ministers and central bankers in Berlin, Alogoskoufis said Greece was «committed to ensuring no slippages» in this year’s deficit and would take measures to eliminate any overruns if necessary. Greece will eliminate the deficit by 2010 as agreed, he said. Under its current plans Greece still forecasts a 1.2 percent deficit in 2009, the last year for which it has official forecasts. «We were among those who strongly supported the idea» of accelerating deficit reduction, he said. Italy In a separate development, Italy said it had managed to dilute a plan by eurozone finance ministers to eliminate budget deficits in the single currency bloc by 2010. Ministers in the 13-nation group undertook the commitment to take advantage of the current economic upswing by accelerating existing plans for deficit reductions. They also wrote in a document that most countries should achieve a balanced budget by 2008 or 2009, «and all of them should aim for 2010 at the latest.» «I succeeded in having this recommendation expressed as something desirable rather than a formal commitment,» Economy Minister Tommaso Padoa-Schioppa told reporters. Italy, under its latest Stability Program, aims for a balanced budget only in 2011. Italy is a serial offender in terms of fiscal indiscipline. Its budget deficit has exceeded the EU’s three percent of GDP ceiling for every year since 2002 and its 2006 deficit, at 4.4 percent, was the highest since 1996.

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