ECONOMY

EU, ECB officials pore over plans

European Commission officials visited Greece’s Finance Ministry yesterday to assess plans on how the government intends to reduce its burgeoning budget deficit. The meetings, scheduled to run until the end of the week with the participation of European Central Bank (ECB) representatives, come a day after Finance Minister Giorgos Papaconstantinou announced that Greece will cut its budget deficit to 3 percent of gross domestic product by 2012, a year earlier than expected. The European officials were briefed on how the shortfall will be reduced, as outlined in the Growth and Stability Program that will be submitted to Brussels by the end of the month, a government source told Kathimerini English Edition. «They will also meet with officials from the Labor, Defense, Health and Economy ministries during the week,» the source said. After revising the estimated 2009 budget deficit more than three times higher to 12.7 percent of GDP, the highest in the EU, the government has come under intense pressure from markets and EU peers to take steps to help the country avoid possible bankruptcy. The revised plan means the government will have to slash its deficit by 4 percent of GDP, or 10 billion euros, in 2010 followed by two annual cuts equivalent to 3 percent of annual economic output. The minister reiterated yesterday that Greece will not ask for help to get its public finances in order. «We don’t expect to be bailed out by anybody as I think it is perfectly clear we’re doing what needs to be done to bring the deficit down and curb the public debt,» Papaconstantinou told Bloomberg. Meanwhile, the spread of 10-year Greek government bond yields over German Bunds was at around 231 basis points, after an earlier small spike to 235 bps. [email protected]