Greece will present the European Commission on Friday with its blueprint for emerging from a financial crisis that has shaken the eurozone, the Socialist government said on Thursday. The plan aims to rein in the country's runaway public deficit and bring it under the limits imposed for countries sharing the euro currency by 2012, Prime Minister George Papandreou said. "Our three-year effort will be decisive for the future of the country," Papandreou told a cabinet meeting on the crisis programme which European authorities have requested. "We want to turn the page as fast as possible." "We have defied predictions in the past, we will do it again today," he said. "I am sure that our European partners will appreciate our efforts, not only from a government but from an entire population."
Finance Minister George Papaconstantinou described the Greek plan as a "roadmap" to overcome "great obstacles" and reverse the "huge credibility gap" that Greece is facing in the financial markets.
The crisis plan aims to reduce the public deficit to 2.8 percent of gross domestic product by 2012, under the 3.0 percent limit for countries sharing the euro currency, he said. The deficit reached 12.7 percent of GDP last year.
The programme seeks to stabilise Greece's debt burden -- one of the highest in the eurozone -- and reduce it to 117.7 percent of GDP by 2012.
The programme also forecasts an economic contraction of 0.3 percent in 2010. It foresees a return to growth of 1.5 percent in 2011 and 1.9 percent in 2012.
Across Europe, there is concern that serious fiscal problems in Greece and elsewhere threaten the credibility of the eurozone and could be a precursor to similar debt crises in other European economies.
"In the recent past, we ourselves gave reason (for mistrust) and it is up to us to restore our country's reputation again," Papandreou told a news conference on Wednesday.
Greek officials concede that Athens still has a mountain to climb to regain credibility and analysts are still sceptical that Greek plans will work.
"The further details provided by the Greek government today on how it plans to tackle the fiscal crisis are unlikely to reassure the markets much," Capital Economics European economist Ben May said in a note.
"Its fairly optimistic forecasts for the economy to shrink by 0.3% this year, expand by 1.5% in 2011 and pick up thereafter, suggest that it is relying on a cyclical upturn to do much of the work," he said.
On Thursday, the Greek statistics service said unemployment in the country had risen to 9.8 percent in October 2009 from 9.1 percent a month earlier.
Greece's woes were set to dominate a meeting of European Central Bank governors on Thursday that was nominally supposed to focus on interest rates.
Athens is not the only eurozone capital causing alarm in Frankfurt however.
The credit rating agency Moody's has warned that Portugal's economy also faces a "slow death" unless it becomes more competitive and officials collect more tax revenues.
15.01.2010
