Ministers to approve Greek rescue plan

Ministers to approve Greek rescue plan

Plan was drawn up by the Greek government, with help from the European Commission.

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The finance ministers of the European Union’s member states are to approve on 16 February a structural reform plan for Greece’s public finances.  

The plan was drawn up by the Greek government, with help from the European Commission, which gave it official endorsement yesterday (3 February).

Joaquín Almunia, the European commissioner for economic and monetary affairs, said yesterday: “The Commission will monitor the execution of the budget and of the reforms very closely and regularly.”

The plan is intended to bring the country’s budget deficit below 3% of gross domestic product (GDP) by 2012. It includes increases in excise duties, a crackdown against tax evasion, a pay freeze for civil servants, job-cuts in the public sector, as well as healthcare and pensions reforms.

Conditions

The Commission said that ministers should approve the plan on condition that Greece provides more detail on measures it plans for 2011 and 2012. It said that this extra data should be provided by Greece over “the coming months”. It also said that Greece should provide further details about an additional set of reforms it announced on Tuesday (2 February), and that these should be incorporated into the plan.

Greece estimates its deficit for 2009 at 12.7% of GDP, the largest in the eurozone.

No bail-out

Almunia said that Greece did not need a bail-out by the EU or the International Monetary Fund, adding that the EU “had instruments enough” to deal with the crisis in Greece. European Voice reported on 21 January that EU officials was exploring the possibility of providing a heavily conditioned loan to Greece without resorting to the IMF.

Greece will be required to submit by mid-March a calendar to the Commission setting out how it will achieve its budgetary target for 2010 (a deficit of 8.7% of GDP). Greece will have to submit quarterly reports, starting in mid-May, on its implementation of the reform plan. Ministers will also call on Greece to finalise an action plan to improve its economic statistics.

Authors:
Jim Brunsden 

and

Constant Brand 

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