Greece and EU/IMF pause deficit talks

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Greece and EU/IMF pause deficit talks

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Talks have been put on hold between Greece and international inspectors over whether it has met conditions for its next bailout pay.

The unplanned pause was one factor that pulled down stock markets around Europe, along with the weak US jobs numbers.

Officials from the European Union, International Monetary Fund and European Central Bank say there are disagreements over why and by how much Athens programme to cut its deficit has fallen behind schedule.

Finance Minister Evangelos Venizelos said the talks had not been suspended and would resume on September 14, after technical experts had had a chance to study relevant data.

Structural reforms needed to be accelerated as Greece’s economy would contract by around five percent this year and likely stay in recession in 2012 too, affecting its ability to hit its fiscal targets, he told a news conference.

The government and its international lenders said on Thursday that Greece would miss this year’s budget deficit target, but they disagreed on how big the slippage would be and what was to blame.

The EU/IMF inspectors visiting Athens feel Greece is not pursuing reforms vigorously enough — and have in particular criticised the lack of progress on privatisations and on labour and pension reforms — while Greek officials cite the worse-than-expected recession as the main culprit.

Venizelos said Greece was not currently considering introducing extra austerity measures.