Euro tremors as budget figures predict Greece will miss latest reduction target
Published 03/10/2011 | 08:41
BUDGET figures released last night in Athens showed the Greek government will miss a key deficit reduction target.
Inspectors from the IMF the EU and ECB are currently in Greece to decide whether to approve an €8bn loan.
A source said that talks have not concluded on the next bailout tranche, dismissing earlier statements by Greece's deputy finance minister that the negotiations have been broadly completed.
The Greek government will run out of money within a matter of weeks if it does not receive the loan.
The expectation had been that Greece would have a deficit this year of 7.6pc of GDP.
But the statistics released by the Greek Finance Ministry predict the deficit will actually be 8.5pc of GDP.
The Greek economy is shrinking, so projections made a matter of months ago are out of date.
However the pressure will still be on the Athens government to reach the original targets.
There was even a qualification over the revised target as the finance ministry said the 8.5pc of GDP target could be achieved if "the state mechanism and citizens" respond over the remaining three critical months of 2011.
Finance Ministers are expected to receive a report today from the troika delegation on how Greece is progressing.
The Greek cabinet approved a plan late on Sunday to slash 30,000 state workers within 12 months, but despite that dramatic move, the question now is whether it is enough.
The euro has fallen to its lowest level in more than eight months in trade on Asian markets this morning.
Hong Kong's market slumped by almost 5pc, while Japan's Nikkei fell by almost 2pc.