Greece may well become the first EU member state to face penalties if it fails to counter the fiscal crisis engulfing the country.
The Greeks are poised to introduce tough austerity measures to reduce its budget deficit, which is running at four times the EU limit of three per cent.
George Papaconstantinou is the Greek Finance Minister:
“Well, the political commitment is there. We presented yesterday a very serious and credible programme of fiscal consolidation, first reactions are positive and now we are moving to implementation.”
The Greek government’s latest plan looks to reduce spending by some 10 billion euros along with tax hikes and the sale of 2.5 billion euros worth of state assets.
However, the jury is out on the effectiveness of the proposals and many believe the markets will only start to believe if the plans transfer from paper into action.
Sweden’s Finance Minister Anders Borg slammed Athens for its economic mis-reporting calling it “fraudulent.” He also suggested a European bank tax similar to a US scheme, in a bid to fix broken public finances and protect against any future financial turbulence.