ECONOMY

In Brief

Cash budget deficit cut by 28 pct; decline slows Greece cut its cash budget deficit by 28 percent in the first nine months of 2010 versus a year earlier, with the pace of decline slowing from the first half on higher debt-servicing costs, central bank data showed yesterday. Greece is scrambling to shore up its public finances and attain fiscal targets agreed to with the European Union and the International Monetary Fund in exchange for 110 billion euros ($141 billion) in emergency funding. The overborrowed country has front-loaded its fiscal adjustment by making sharp cuts in primary spending and is implementing structural measures to regain competitiveness and return its economy to a growth path. Athens aims to slash the budget hole to 7.8 percent of gross domestic product this year from 13.8 percent in 2009, hoping to convince markets it is dealing effectively with its fiscal crisis as it eyes returning to markets for borrowing sometime in 2011. The Bank of Greece said the central government’s cash deficit – the net balance of the state budget including movements in public debt accounts – fell to 18.5 billion euros ($25.7 billion) in January-September from 25.6 billion in the same period a year earlier, meaning a lower net borrowing need. In the first half, the cash deficit shrank 41.8 percent on an annual basis. «The reduction of the deficit is within the target range set by the government,» said economist Dimitris Maroulis at Alpha Bank. «The key development behind the improvement seen in the nine-month period is the large drop in primary spending which more than covered a shortfall in targeted revenues.» He also said a prolonged truckers strike during September had a negative impact on revenues. (Reuters) Debt agency to sell 900 mln euros in T-bills Greece’s debt management agency says it will issue 900 million euros ($1.26 billion) worth of 26-week Treasury bills next week as part of its regular sales of short-term debt. The agency said yesterday that the T-bills will be issued on Tuesday and will have a settlement date on Friday. Noncompetitive bids of up to 30 percent of the auction amount can also be submitted until noon on Thursday. Last month Greece began regular monthly short-term debt issues, maintaining a presence in the market after its financial woes left it essentially blocked from the long-term international debt market. The country is currently receiving rescue loans from a three-year 110-billion-euro package by the International Monetary Fund and other eurozone countries. (AP) Turk-Chinese deals Turkey and China plan to build a strategic partnership by deepening their transport links and tripling trade volume from $17 billion in five years. «We have decided to establish a strategic partnership and this meeting is a milestone on that journey,» Chinese Prime Minister Wen Jiabao said in Ankara yesterday at a news conference with Turkish Prime Minister Recep Tayyip Erdogan. The decision is a «recognition of Turkey’s regional and international strength,» Wen said. Turkey has emerged from the global financial crisis with economic growth exceeding 10 percent in the first two quarters, rivaling China’s expansion and outpacing all other Group of 20 developed economies. Erdogan has boosted ties with neighbors, such as Iran, Iraq and Syria, and opened more embassies and trade missions in Africa. The two countries aim for $50 billion in «balanced» trade annually by 2015 and will use the lira and the yuan as the means of exchange, Erdogan said. The two countries signed eight economic agreements on bilateral trade, economic cooperation in developing countries, information technology and transport, including a pledge to build a rail link to reconstruct the old Silk Road trade route between Europe and the Far East. (Bloomberg) No-confidence vote The Bulgarian parliament rejected yesterday the first no-confidence motion against the year-old center-right government, which was accused by the opposition of failing to overhaul the ailing healthcare sector. The minority cabinet of Prime Minister Boyko Borisov, backed by right-wing parties, survived the challenge as expected, with 144 lawmakers voting against the motion and 70 in favor. (Reuters)