Greece under economic microscope

Greece will face the most stringent
monitoring of any European Union country as it attempts to balance its finances
over the next few years.

The news came as the European
Commission confirmed its support of Greece’s plans to reduce its deficit which
is four times higher than eurozone rules allow.

EU economic commissioner Joaquín
Almunia also launched an infringement procedure to ensure Greek authorities
report reliable budgetary statistics.

Mr Almunia welcomed the additional
fiscal measures taken by Greece.

He said: “We consider that the
programme is ambitious, and that the programme in terms of targets is
achievable.

“We are endorsing the Greek
programme. But at the same time we know that the implementation of the
programme is not easy. It is difficult. This deserves support.”

However, Mr Almunia acknowledged
that tackling the debt was difficult politically and complex technically.

He said that EU officials would
monitor carefully the efforts of the Greek programme and would demand extra
action if it was not on track to meet the deficit goals.

EU economic ministers will next
meet on 16 February. Provided they accept the commission’s recommendations, new
deadlines will be set for Greece to review progress with officials.

It will have to submit a first
report on 16 March, with a second deadline on 16 May.

Greece is struggling with its worst
economic crisis since joining the euro in 2001.

It has one of the smaller economies
in the European Union, but it is being watched closely because of the doubts
financial markets have in it.

Its long-term deficit cutting plan
aims to reduce the budget shortfall, currently 12.7 per cent  to less than 3 per cent by 2012, but many
people in Brussels and beyond remain sceptical.

Prime Minister George Papandreou
has urged the public to support his programme of tough austerity measures,
which includes increases on fuel duty and a public sector pay freeze.