Greece 2010 deficit shoots up to 10,5pc

anticipate a need for Athens to restructure giant debts estimated at almost 330 billion euros.
Athens had originally aimed to squeeze the deficit down to 8,1 percent of gross domestic product in 2010, from 15,4 percent in 2009, as part of a deal last year to overhaul its economy and slash public spending in return for the 110-billion-euro EU-IMF loan that saved the country from default.
Finance Minister George Papaconstantinou acknowledged earlier this month that the deficit would be “higher than 9,5 percent”, without giving any figure.
The last official estimate in Athens said it would be 9,4 percent.
Greek conservative newspaper Eleftheros Typos estimated that the Greek government must make additional savings of some eight billion euros (US$11,3 billion) “to save this year’s budget from a complete derailment”.
Experts from the European Commission, European Central Bank and International Monetary Fund have been in Athens this month, discussing future steps to be taken with Athens locked out of commercial money markets since accepting the international bailout almost one year ago.
Papaconstantinou has said Greece could buy back some of its debt – in 2010 estimated at 142,8 percent of gross domestic product – provided enough money was raised from state asset sales in the programme to be detailed mid-April.
The EU’s data agency, Eurostat, said yesterday that Greece’s debt totals 328,5 billion euros.
With money markets believing Greece will have to restructure its long-term debt, its creditors – notably the IMF – have encouraged the socialist government to try to build a national consensus around the needed reforms.
Across the 17-state eurozone, which has also seen Ireland agree a 67,5-billion-euro international bailout and Portugal request its own aid expected to amount to some 80 billion, the average deficit in 2010 fell to six percent, from 6,3 percent in 2009, Eurostat said.
That is still double the notional permitted limit under an EU agreement, the Stability and Growth Pact, that is currently being rewritten to introduce financial sanctions for states that repeatedly breach shared targets.
Twenty-two of the 27 EU states were in deficit above the 3 percent mark, with only Estonia recording a surplus and Sweden in balance.
The combined debt-to-GDP ratio for the eurozone increased from 79,3 percent at the end of 2009 to 85,1 percent at the end of 2010 – with 14 of the EU 27 coming in above the notional 60-percent limit on this category. – AFP.