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Ambitious Greece promises to turn budget surplus for 2012

The Greek government promises to spend less than it takes in in 2012 – but says it won’t repay interest on loans before that.

Greece's finance minister Evangelos Venizelos addresses the media after a cabinet meeting at the Greek Parliament in Athens last night.
Greece's finance minister Evangelos Venizelos addresses the media after a cabinet meeting at the Greek Parliament in Athens last night.
Image: KOSTAS TSIRONIS/AP

GREECE’S FINANCE MINISTER has affirmed his country’s plans to turn a budget surplus next year – despite the country falling deeper and deeper into the red as its struggles to get to grips with government spending.

AP reports that Evangalos Venizelos has asserted his plans to ensure that Greek government income will exceed its spending in 2012 – even though the government’s spending surplus continued to rise in the first two-thirds of this year.

While the country ran up a loss of €14.8bn in the first eight months of 2010, it lost nearly €18.1bn between January and August of this year. AMNA reports, though, that this number was lower than the deficit expected under its EU-IMF deal.

Venizelos’s also said Greece was being “threatened and humiliated” by its international paymasters, who he said are insisting on the firing almost 100,000 public sector workers.

The Wall Street Journal reported that Venizelos also attacked the other Euro member states, accusing them of blaming Greece for their own domestic problems:

We should not be the scapegoat or the easy excuse that will be used by European and international institutions in order to hide their own lack of competence to manage the crisis.

His comments come hours before a crisis conference call with the EU and IMF, where he will brief the Troika on overnight cabinet talks at how his government proposes to cut spending and raise new income.

Though Venizelos also insisted that the country would enact enough measures to guarantee the release of its next bailout funds next month, the IMF’s head in Athens has laid down the gauntlet to the government.

“Greece needs to create a level playing field, transparency in the economy,” Reuters quoted Bob Traa as saying:

Reduce licensing, introduce more transparency in the market … Take away the sludge out of the engine. There is a need to clean the economic legislation to set the economy free.

Protests continued outside parliament buildings last night as the cabinet continue talks on how to bridge the gap between spending and income. The government will run out of cash next month unless it secures the EU-IMF’s latest batch of bailout loans.

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