ECONOMY

Barroso welcomes budget efforts

European Commission President Jose Manuel Barroso yesterday welcomed Greece’s plans to tackle macroeconomic imbalances and deliver on structural reforms. «Greece faces particular difficulties with its public finances,» he told reporters after meeting with Prime Minister Costas Karamanlis in Athens. «I welcome the commitments made by the Greek government.» With government revenues missing targets, the budget deficit, which already reached 5 percent of gross domestic product (GDP) last year, is expected to remain well above the EU’s 3 percent ceiling, forcing the government to borrow more to plug the hole. The European Union yesterday officially launched disciplinary action against Greece – along with France, Ireland and Spain – for allowing their deficits to rise above the limit set by the EU. Under EU rules, the bloc’s member countries are supposed to keep their budget shortfalls to less than 3 percent of GDP, although they are allowed some leeway when the economy sours. In a document adopted by foreign ministers in Luxembourg yesterday, EU countries urged the four countries and Britain, which is already subject to disciplinary action, to take measures to rein in their deficits by the end of October. The text calls on Ireland to respect a 2013 deadline for bringing its deficit to less than 3 percent of GDP, France by 2012, Greece by 2010, Spain by 2012 and Britain by March 2014.