Parla stasera alle 19:00 Papandreou
Greece’s Papandreou May Tackle Budget in Speech on Crisis Today
By Maria Petrakis
Dec. 14 (Bloomberg) --
Greek Prime Minister George Papandreou may announce measures to cut the European Union’s biggest budget deficit later today when he makes a speech to politicians, labor unions and lobby groups.
Papandreou will speak at 7 p.m. in Athens, according to an e-mailed statement from the prime minister’s press office late yesterday.
The prime minister will address “the economy, the productive model, the credibility of the state mechanism, the confidence of our European partners and, above all, the daily life and prospects of Greeks,” according to the statement.
Greek bonds plunged to their lowest in seven months last week and stocks slumped after Fitch Ratings cut Greece one step to BBB+, saying Papandreou’s Pasok government isn’t doing enough to tame a deficit of 12.7 percent of output. Fitch’s move came a day after Standard & Poor’s put its A- rating on watch for downgrade.
The yield on the 10-year Greek government bond, which climbed as high as 5.597 percent on Dec. 19, rose 1 basis point to 5.295 percent today.
Papandreou, elected in October on pledges of more spending and higher wages to spur growth, said on Dec. 11 he was determined to cut the deficit without hurting wage-earners and poorer Greeks. He vowed to reduce bureaucracy by cutting two layers of government administration and to clamp down on tax evasion to trim the shortfall.
Greek Finance Minister
George Papaconstantinou promised to speed up fiscal and budget reforms to overhaul the economy on Dec. 12, saying the country has no time to spare after investor concerns sent bonds and stocks tumbling.
Gamble
“The biggest gamble the government has is how to regain credibility,” Papaconstantinou said in a speech in Athens. “The initiatives will be faster and more dynamic. We don’t have the luxury to wait. We will speed up everything.”
European Central Bank Vice President
Lucas Papademos characterized Greece’s fiscal situation as “extremely serious,” in comments to reporters in Berlin. “Greece should take decisive action and in a timely manner,” Papademos said.
The government will begin talks this week on crafting a new tax system that will be fairer and more effective, according to the Greek finance minister.
The year will close with 300 billion euros ($438.5 billion) in debt and the stability plan the government will submit in January needs to include a plan for the “gradual reduction” of that load, Papaconstantinou said.
Debt will stand at 112.6 percent of GDP, the second-highest in Europe after Italy, according to EU forecasts. Greece’s 2010 budget projects the deficit will be reduced to 9.1 percent of gross domestic product.