Thursday, September 22, 2011

Greece keeps tightening belts

Greece announced that it plans to accelerate budget cuts in order to obtain the next tranche of bailout.

Additional austerity measures announced yesterday include a 20% cut in pensions of more than 1,200 euro ($1,627) a month and lower wages for 30,000 state employees.

Greek government pledged yesterday to complete the 28-billion-euro cuts in June by 2014 instead of 2015.  

Talks on the Greek aid payments resumed after IMF and EU monitors suspended the negotiations earlier in September after the data showed that Greece’s budget deficit this year through August widened to 18.9 billion euro exceeding the 18.1-billion-euro target. Greece aims to cut its budget shortfall from 10.5% in 2010 to 7.5% in 2011.

According to IMF forecast, Greek economy will contract by 5.5% this year and by 2.5% in 2012.

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