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EU pressures Greece on deficit cuts

EU pressures Greece on deficit cuts
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EU finance ministers meeting in Brussels have set Greece a deadline of mid May to implement “urgent measures” to cut its budget deficit.

Jean-Claude Juncker, who heads the Eurogroup of euro zone finance ministers, said Athen’s must bring in convincing austerity measures or face sanctions.

One month from now Brussels wants details of how Greece will hit its budget targets for this year:

Olli Rehn, the EU’s Economic and Monetary Affairs Commissioner, told a news conference: “The Commission will be on the ground in Athens in the coming days, in the next couple of days, this week or next week, with experts from the ECB and IMF delegates to verify the implementation and results of these measures.”

The tough stance was cheered by some economists who saw tax rises and spending cuts as essential to getting Greece back on track and able to borrow again at reasonable rates:

Oliver Roth, of Close Brothers Seydler Bank, said: “I think the European Commission is doing the right thing in forcing budgetary discipline on Greece. This austerity plan is ambitious, but it is necessary. It will be a quantum leap for Greece to implement this plan.”

At the same time problems continued to mount for the Greek government.

The EU has asked for an explanation of reports that it engaged in derivatives trades with US investment banks in 2001 when it was joining the euro.

That was not illegal at the time but may have allowed Athens to hide the size of its debt and deficit from EU authorities.

Domestic opposition to the proposed austerity measures continues.

Queues formed at service stations as Greek customs officers are on a three day strike leading to fears of disruption to imports of fuel.