Greece will meet 2010 budget gap despite Eurostat revision

Greece will shrink its budget deficit in line with EU/IMF targets this year despite an expected upward revision of last year's budget gap by Eurostat, the country's prime minister said on Thursday.

"Despite the new revisions by Eurostat we will meet the targets we have set for the deficit this year and it will not be necessary to take measures that will further burden Greek citizens," Prime Minister George Papandreou told socialist party deputies in parliament.

The European Union's statistical office will revise upwards Greece's budget deficit and public debt figures for 2006-2009 this month, the European Commission said on Wednesday.

Based on a draft 2011 budget released on Monday, the debt-laden country expects to slash this year's budget deficit to 18.5 billion euros — or 7.8 percent of GDP — from 13.8 percent of GDP in 2009 and shrink it further to 7.0 percent next year, below a 7.6 percent target under an IMF/EU bailout plan.

Eurostat said in April that it might revise upwards Greece's 2009 deficit by up to 0.5 percentage points of GDP, and public debt by between 5 and 7 percentage points, to account for uncertainties in the reported statistical data. 
Greece must meet key fiscal adjustment targets under the three-year 110 billion euro bailout package it agreed with the IMF and its euro zone peers in May to continue to receive funding to cover deficits and maturing bonds.

"We have already taken the most painful decisions in the first year (of adjustment). But we must be careful, the alert has not ended and 2011 will be a critical second half. We are continuing on the course to save Greece," Papandreou said.