Direxion Daily Financial Bear 3x Shares FAZ

GREECE TO MISS DEBT TARGETS IN 2011 AND 2012

[canestsal]

GREECE TO MISS TARGETS IN 2011 AND 2012

2 October 2011 Last updated at 16:27 ET

Greece has said its budget deficit will be cut in 2011 and 2012 but will still miss targets set by the EU and IMF.

The 2011 deficit is projected to be 8.5% of GDP, down from 10.5% in 2010 but short of the 7.6% target.

The government, which on Sunday adopted its 2012 draft budget, blamed the shortfall on deepening recession.

The figures come as inspectors from the IMF, EU and European Central are in Athens to decide whether Greece should get a key bail-out instalment.

Greece needs the 8bn euros (£6.9bn; $10.9bn) instalment to avoid going next month.

Bankruptcy would put severe pressure on the eurozone, damage Europeanbank finances and possibly have a serious knock-on effect on the worldeconomy.
'Unanimously approved'

The Greek financeministry said on Sunday that its unpopular austerity measures would haveto be adhered to even if the latest targets were to be met.

It said: "Three critical months remain to finish 2011, and the finalestimate of 8.5% of GDP deficit can be achieved if the state mechanismand citizens respond accordingly."

It released figures for 2012's projected deficit, putting it at 6.8% of GDP, also short of the 6.5% target.

The figures came as the government met to approve Greece's draft budget for next year.

It blamed an economic contraction this year of 5.5% - rather than May's3.8% estimate - for the failure to meet deficit targets.

The cabinet meeting also approved a measure to put 30,000 civil service staff on "labour reserve" by the end of the year.

This places them on partial pay with possible dismissal after a year.

"The labour reserve measure was approved unanimously," one deputy minister told Reuters.

This measure, along with other wage cuts and tax rises, have been partof a package intended to persuade the so called "troika" of the EU, IMFand ECB to continue with its bail-out.

The inspectors willreport back to EU finance ministers soon but analysts believe they havelittle choice but to approve the latest tranche.

The Greek austerity measures are hugely unpopular at home and have led to a wave of strikes and protests.

Many Greeks believe the austerity measures are strangling any chance of growth.

Are you in Greece? What do you think of the budget deficit targets setby the EU and IMF? Please fill in the form below if you are willing tobe interviewed by the BBC.

Send your pictures and videos [e-mail] or text them to 61124 (UK) or [phone](International). If you have a large file you can upload here.