EU urges Greece to enact more spending cuts

Olli Rehn says further measures probably needed

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The group of countries using the common European currency, the euro, say that Greece needs to make more effort to save its economy.
      “Let’s not get ahead of things, but it is likely that more action will be demanded of Greece”, said Olli Rehn, the European Commissioner for Economic and Monetary Affairs to Helsingin Sanomat late Monday night.
      The countries of the euro zone will decide by mid-March if Greece will need to tighten its belt further.
     
Rehn, who took part in his first meeting of the Eurogroup on Monday, said that he was pleased with the decision made on Greece.
      “We will determine together if there is a need for further action, and how much”, Rehn said.
      Greece has committed to cutting its budget deficit by four percentage points this year. The goal is a tough one to achieve.
     
Greece’s debt burden is greater than its GDP, and Greece’s budget deficit currently stands at nearly 13 per cent.
      The chairman of the Eurogroup, Luxembourg Prime Minister Jean-Claude Juncker said that the Greek government has promised to do all it can to achieve the goal. “We will not leave Greece on its own”, he said late Monday.
      Juncker said that Greece needs to increase its tax revenue and cut expenses.
     
The countries of the Eurogroup can decide on further action by vote; no consensus is needed, and Greece does not have to be consulted, Juncker pointed out.
      Possible further measures by the Greek government could include higher taxes on cars and luxury goods. Greece has already drawn up a list of spending cuts and additional taxes that it plans to implement.
     
Rehn said on Monday that the European Commission will take statistics kept by member states under closer scrutiny.
      The aim of the move is to improve the reliability of statistics. Greece’s problems stayed hidden away for a long time because of statistical errors.


Previously in HS International Edition:
  Rehn gets Economic & Monetary Affairs Commissioner post (27.11.2009)

Helsingin Sanomat