Greek PM warns of another tough year

As the draft budget for 2011 was presented yesterday, Prime Minister George Papadandreou warned his ministerial team and the Greek people that they are only nearing the end of the “first half” of their fight to get the country’s public finances back on track.

Papandreou said that next year would be crucial to Greece’s effort to slash its public deficit further and get the economy on the road to growth. “If we succeed in 2011, and we will succeed, we will have real cause to believe that the economy will change direction and that 2012 will be a year of growth,” he told the Cabinet, which approved the draft budget. “Our success in 2011 will be the crucial second half,” said Papandreou. “After 2011, the deficit will mainly be connected to the needs of servicing our large debt and not to the creation of further deficits. Then, 2012 will be a year of growth, supported by a sound basis, not borrowed money.” The government aims to reduce Greece’s deficit by 7 percent this year but this will be accompanied by a hike in VAT on some products and services, and a projected rise in unemployment to 15 percent by the end of 2011.

News source: Ekathimerini link: article