Greece's budget deficit in the first two months this year has plunged more than 77 per cent, the finance ministry says, as the debt-strapped country tries to put its public finances in order.
By
AFP

Source
AFP
23 Mar 2010 - 7:50 AM  UPDATED 23 Aug 2013 - 2:09 PM

Greece's budget deficit in the first two months this year has plunged more than 77 per cent, the finance ministry says, as the debt-strapped country tries to put its public finances in order.

Government receipts rose 13.2 per cent to 8.75 billion euros ($A12.94 billion) while spending was cut 9.6 per cent to 8.99 billion euros ($A13.29 billion), leaving a public deficit of 904 million euros ($A1.34 billion) compared with the year-earlier 3.99 billion euros ($A5.9 billion) shortfall.

The finance ministry noted that under a drastic recovery plan already submitted to the EU, Greece was supposed to increase revenues by 11.7 per cent and cut spending by 3.5 per cent during the two-month period.

It said the increase in tax revenue largely came from an exceptional additional levy on large companies' 2008 earnings, higher consumption taxes and an increase in Value Added Tax on fuel, tobacco and alcohol.

On the spending side, the government reduced social welfare, its own operating expenses and consumption while public investment was slashed by more than half.

Athens, faced with massive debt and huge budget deficits well above eurozone norms, has been forced to take draconian steps as it tries to restore the public finances to health and bolster its credibility on the international markets.

Current plans call for the budget or public deficit, put at 12.7 per cent of Gross Domestic Product in 2009, to be cut sharply to 8.7 per cent by the end of this year and to be back below the eurozone three per cent limit by 2012.