ECONOMY

Greece pushes fiscal plan abroad

Economy and Finance Minister Yiannis Papathanassiou flew to Germany yesterday in order to meet with his counterpart Peer Steinbrueck as part of Greece’s efforts to show its EU peers it is taking the steps needed to improve its fiscal record. According to sources, top officials from several eurozone countries are annoyed with Greece due to its continually revising its budget figures and failure to take the steps needed to reduce its deficit to below 3 percent of gross domestic product by 2010. Papathanassiou has also had similiar meetings recently with other senior officials, including French Finance Minister Christine Lagarde and European Central Bank President Jean-Claude Trichet. Greece, along with Ireland, is considered to be a weak link in the eurozone. However, Athens has not taken certain steps to correct this as Dublin has. Papathanassiou will be keen to show Steinbrueck and other peers at the early June European Union finance ministers’ (Ecofin) meeting that the much-needed measures are being adopted. Earlier this week, the Greek government approved the merger of hundreds of state bodies and organizations in a bid to cut spending in the public sector. In March, the government also said it will limit pay hikes to civil servants this year in order to save resources. Sources have said Athens is waiting until after the European Union’s parliamentary elections in early June before announcing any steps to increase taxes as a means of propping up budget revenues. Officials in Brussels also disagree with Greece over its 1 percent growth forecast for this year – at a time when the eurozone is seen as shrinking by an annual pace of some 4 percent. The European Commission expects Greece’s 250-billion-euro economy to shrink by 0.90 percent year-on-year in 2009 before recovering to a growth rate of 0.1 percent next year.