August 26, 2011 / 4:07 PM / in 8 years

Greece faces tough EU/IMF talks, fiscal slip - source

ATHENS (Reuters) - Greece risks missing its 2011 fiscal targets and can expect tough discussions with senior EU, IMF and ECB inspectors next week on its bailout programme, a source close to the inspectors said on Friday.

A woman walks in front of the Bank of Greece in Athens August 26, 2011. REUTERS/John Kolesidis

EU and IMF mission chiefs for Greece will be in Athens on Monday for an inspection visit that will determine whether the debt-choked country will receive a sixth aid tranche from its international lenders to avoid bankruptcy.

“There is a risk concerning the targets, which the Greeks say is due to the recession. We have some doubts whether it’s entirely due to the recession,” the official told Reuters.

“Not meeting the targets will trigger very difficult negotiations,” the official said. “It will not be easy next week.”

Greece must cut its budget deficit to 7.6 percent of GDP this year from 10.5 in 2010, under the terms of the EU/IMF bailout.

Finance Minister Evangelos Venizelos told lawmakers earlier on Friday the government will come “very close” to meeting the targets if it fully applies the austerity measures already agreed.

Venizelos has also said Greece’s economy may contract by up to 5.3 percent this year instead of an earlier 3.9 percent projection, union officials said this week.

But the official close to the inspectors said that, although it was likely that the economy had contracted more than forecast, it was very hard to make updated projections.

“We will have difficulties making a projection for the economy because the statistics office has not published seasonally adjusted data. We don’t really know where the economy stands in the short term,” the official said. “It’s more or less a shot in the dark.”

Greece’s statistics office ELSTAT published no quarter-on-quarter data for April-June and said the economy had contracted by an annual 6.9 percent during these three months, on a non-seasonally adjusted basis.

Unadjusted data tend to put a rosier tint on output by overstating activity from sectors such as tourism and construction which pick up during the summer.

Reporting by Ingrid Melander

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below