The Greek economy is shrinking at an alarming rate, with Mr Venizelos last week admitting it will likely contract by more than 4.5pc this year, worse than an earlier 3.5pc forecast. Greece's debt, meanwhile, has ballooned to over €350bn. The public deficit is also running dangerously high, coming in at €14.7bn in the first half of 2011, compared to a target of €16.7bn for the entire year. In July it climbed further to €15.5bn, deputy finance minister Filippos Sachinidis told parliament on Wednesday. He added that part of state revenue included in this year's calculations will not be collected until early 2012. To make up the shortfall, on Thursday the authorities raised sales tax for food at restaurants and hotels by ten points to 23pc.The Greek finance ministry went on the defensive after a new budget watchdog released an internal report warning that debt was "out of control". Evangelos Venizelos, the Finance Minister who earlier this week had to explain to auditors from the EU, ECB and IMF why the debt-laden country had missed targets, put the report down to inexperience. He said in a statement: "All responsible international organisations know in which way macroeconomic and fiscal reports are compiled, checked and published. It is clear that the budget office still lacks this knowledge, experience and responsibility." The report warned that the dynamic of Greece's enormous debt is "out of control" and said slippage on meeting deficit targets, exacerbated by a deep recession, threatened to cancel out the benefits of a new EU bailout. Eurozone leaders approved a new €109bn bailout for Greece in July to save the country from bankruptcy, with the private sector providing another €50bn.
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Friday, September 2, 2011
The Greek economy is shrinking at an alarming rate, with Mr Venizelos last week admitting it will likely contract by more than 4.5pc this year, worse than an earlier 3.5pc forecast. Greece's debt, meanwhile, has ballooned to over €350bn. The public deficit is also running dangerously high, coming in at €14.7bn in the first half of 2011, compared to a target of €16.7bn for the entire year. In July it climbed further to €15.5bn, deputy finance minister Filippos Sachinidis told parliament on Wednesday. He added that part of state revenue included in this year's calculations will not be collected until early 2012. To make up the shortfall, on Thursday the authorities raised sales tax for food at restaurants and hotels by ten points to 23pc.The Greek finance ministry went on the defensive after a new budget watchdog released an internal report warning that debt was "out of control". Evangelos Venizelos, the Finance Minister who earlier this week had to explain to auditors from the EU, ECB and IMF why the debt-laden country had missed targets, put the report down to inexperience. He said in a statement: "All responsible international organisations know in which way macroeconomic and fiscal reports are compiled, checked and published. It is clear that the budget office still lacks this knowledge, experience and responsibility." The report warned that the dynamic of Greece's enormous debt is "out of control" and said slippage on meeting deficit targets, exacerbated by a deep recession, threatened to cancel out the benefits of a new EU bailout. Eurozone leaders approved a new €109bn bailout for Greece in July to save the country from bankruptcy, with the private sector providing another €50bn.
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