Focus on debt and deficit

The government is determined to lower public debt and narrow the budget deficit, said Economy and Finance Minister Yiannis Papathanassiou yesterday, stressing to voters that he is telling the truth about the economy. Papathanassiou’s comments came a day after the Bank of Greece, the country’s central bank, published its views, with a grim outlook on Greece’s economic picture. The central bank expects growth to slow to zero percent this year and warned that the country may tip into recession. The forecast comes in contrast to the views of the Finance Ministry, which see annual growth at around 1 percent in 2009 as compared to 3 percent last year. «We are telling the truth… and are not hiding problems under the rug,» said Papathanassiou after a meeting with Prime Minister Costas Karamanlis. The European Commission also has a less optimistic outlook for Greece, forecasting a growth rate of just 0.2 percent, as the crisis hits hard two of the country’s largest industries, tourism and shipping. Greece’s public debt is the second highest in the eurozone and its budget deficit last year breached the European Commission’s 3 percent limit, prompting Brussels to launch an excessive deficit procedure (EDP) against the country. The EDP puts Greece at risk of facing sanctions. «We are determined to reduce debt and the deficit and, at the same time, provide a boost to weak social groups, low income earners and pensioners,» added Papathanassiou. The global economic downturn and its impact on the labor market have topped the list of concerns among voters as socialist party PASOK extended its lead over the ruling conservatives to 7.5 percentage points. According to a recent poll, 41.5 percent of voters said they would vote for PASOK in the event of early elections, compared to just 34 percent for New Democracy. PASOK yesterday claimed that the finance minister was panicking and accused the conservatives of leading the economy into a dire situation.

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.