LUXEMBOURG – Eurozone finance ministers yesterday discussed whether to unlock vital loan aid for Greece as markets tumbled in Asia and Europe on a warning from Athens that it will miss budget deficit targets.
The 17 countries sharing the single currency gathered to reach an understanding on whether Greece should get an eight-billion-euro loan, needed to pay next month’s bills but blocked by the IMF for the past month.They will also look at ways of boosting the euro’s rescue fund, the EFSF, to help immunise Europe and the global economy from financial contagion.In Athens, international auditors spent the weekend assessing Greek finances and forecasts following continuing protests over austerity cuts, including staff occupations of ministries.But the mood darkened after the Athens government announced Sunday that its public deficit will come in at 8,5 per cent of gross domestic product (GDP) this year, higher than the 7,4 per cent agreed in June, as its economy is battered by recession.The figure is still better than the 10,5 per cent public deficit Greece recorded last year.For next year the Greek government now forecasts it will be able to squeeze the public deficit down to 6,8 per cent of GDP instead of 6,5 per cent.The changes sent Asian markets into a tailspin as fears heightened of a devastating debt default amid concerns over eurozone policymakers’ ability to surmount the debt crisis.Athens is labouring under a crushing 350 billion euros of debt, with its economy contracting under the austerity measures imposed by the EU and IMF. – Nampa-AFP
