Crunch time for economy this fall

At a time when the country’s industrial production is shrinking, Finance Minister Giorgos Alogoskoufis identified September as being crucial for the nation’s finances, which are set to come under the European Commission’s microscope anew in the fall. Alogoskoufis’s comments yesterday came in response to EU Economic and Monetary Affairs Commissioner Joaquin Almunia, who said that if Greece does not take adequate steps to reduce its budget deficit to below 3 percent of gross domestic product (GDP), the Commission will launch its excessive deficit procedure against the country. The procedure involves the imposition of large fines. Greece will have to submit a progress report on how its deficit reduction is proceeding by the end of October and this will be examined, along with budget data and the Commission’s fall economic estimates, Almunia said. The Finance Ministry has been trying to get next year’s budget deficit to below the eurozone’s 3 percent limit. The figure is expected to fall to around 3.5 percent of GDP in 2005 from more than 6 percent last year. Alogoskoufis reiterated the country’s commitment to this goal. «We will present the budget data, as we are obligated to do, toward the end of September with the draft for the 2006 budget,» he said. In statistical data released yesterday, industrial production so far this year fell, hurt by a solid drop in mining and quarry production. For the first five months of the year, industrial production fell 2 percent year-on-year with mining production off 10.7 percent.

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