21 Sep 2011

Greece to bring forward austerity measures

10:50 am on 21 September 2011

Greece has pledged to bring forward austerity measures, convincing international lenders to return to Athens early next week for talks that it hopes will secure the aid it needs to avert bankruptcy.

After a two-hour phone call with senior officials from European Union and International Monetary Fund emergency lenders, Finance Minister Evangelos Venizelos was set to present his proposals to the Greek cabinet on Wednesday.

Having consistently watched Greece miss its targets, the IMF and EU made clear last week that their patience was running thin, and warned Athens to stop dithering or risk its 110 billion euro loan deal being cut off.

A Finance Ministry official said Greece had agreed to bring forward measures from the so-called "mid-term plan" in which it has committed to slash its budget deficit through 2014 and sell some 50 billion euros in state assets.

The official said the main deficit and debt targets would not change.

The ministry said the conference call, the second in two days, had made satisfactory progress and teams of experts would push on with finalising the 2011 budget and working through a fiscal plan to 2014.

Greece needs an 8 billion euro tranche of loan money by next month to avoid running out of cash.

The country is heading into a fourth year of recession, youth unemployment is 40% and the economy is staggering under a debt expected to exceed 165% of annual output this year.