ECONOMY

EU awaiting post-election update

As election talk remained mainly focused on the economy, the European Commission reminded Greece yesterday that regardless of who wins the most votes, the country needs to meet upcoming obligations to Brussels or face the consequences. The Greek government is required to fill the European Commission in on measures taken to reduce the budget deficit shortly after the October 4 elections, said European Commissioner for Economic and Monetary Affairs Joaquin Almunia. «By the end of October, we need to be informed of the measures adopted in Greece so that we can assess whether they will be effective,» Almunia told reporters in Brussels. The European Commission will decide by the end of the year whether it will launch the punitive excessive deficit procedure against Greece for its large budget shortfall. The Economy and Finance Ministry had forecast the budget deficit this year to come in at 3.7 percent of gross domestic product but sources have indicated the figure could be as high as 7 percent of GDP as the slowing economy weighs on tax revenues and spending exceeds targets. A number of other eurozone countries have also been told to take measures to fight their deficits, including Ireland, Spain and France. Greece, however, has the added burden that it will need to push through structural changes to help make the economy more competitive, such as opening up the heavily regulated labor market. Meanwhile, the European Central Bank (ECB) yesterday denied Greek press reports that its vice president, Lucas Papademos, may return to Athens to join PASOK and head the Economy and Finance Ministry in the event the Socialists win the elections. «Papademos will remain ECB vice president,» said an ECB spokesman in Frankfurt. His term as vice president runs until May next year.