NEWS

‘Mild adjustment’ promised

Greece’s vast budgetary overruns will not prompt austerity measures, the government insisted yesterday, while admitting that deficit and growth figures may be worse than initially expected. Government spokesman Evangelos Antonaros said the deficit for 2004 is now expected to be even higher than the latest official estimate of 5.3 percent of Greece’s gross domestic product. Under European Union and eurozone regulations, the budget deficit ceiling is 3 percent. Antonaros also acknowledged that the growth rate could be «slightly» revised down from Prime Minister Costas Karamanlis’s forecast of 3.9 to 4 percent. But he stressed that the effort to bring the 2005 deficit down to near 3 percent and keep it there in 2006 will not involve shock measures. «Everything will be done through a process of mild adjustment, with strict adherence to the budget,» he said. «The burden will not be passed on to the less well-off sector of the population.» «Everyone has the obligation to contribute to this common effort,» Antonaros said. On Wednesday, the European Commission proposed giving Greece until 2006 to curb its deficit, while urging the government to rigorously implement the budget for 2005. This one-year extension to the original 12 months given to Greece to do the job was decided upon «to create the conditions for a balanced and lasting correction.» The proposal will have to be approved by EU finance ministers next Thursday. Meanwhile, Economy Ministry officials are worried at the poor state of public revenues, which rose 2.34 percent last month year-on-year, compared to an anticipated 12 percent growth. This is largely attributed to the failed funds repatriation scheme, which resulted in only 118.8 million euros returning to Greece under a partial tax amnesty – which netted the state coffers some 3.5 million. The government had hoped to attract some 20 billion euros worth of assets. Also yesterday, industries forecast future layoffs in the sector. The problem is worst among firms employing over 250 people.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.