ATHENS: Greece on Sunday unveiled new budget deficit targets and plans to trim its civil service to meet creditors' demands a day ahead of a eurozone meeting that could free up an eight-billion-euro loan.
The 17 countries that share the debt-challenged euro currency will meet in Luxembourg on Monday in an effort to reach an agreement on releasing the bailout tranche which has been blocked by auditors for the past month.
Divided eurozone ministers will seek to avert a Greek default, which could send stock markets into a panic, deal an unprecedented blow to the European currency and bring the world back to the brink of a fresh financial crisis.
British Prime Minister David Cameron warned Sunday the eurozone must act decisively as it was posing "a threat to the worldwide economy," he told BBC television.
After a extraordinary cabinet meeting late Sunday, the Greek government announced that its budget deficit should drop to 8.5 per cent of gross domestic product in 2011 from 10.5 per cent last year, and in 2012 to 6.8 per cent of GDP.
Both deficit targets hover above the initial forecasts fixed in June of 7.4 per cent of GDP in 2011 and 6.5 per cent in 2012, the latter blamed on a deeper recession.
"This marks the country's entry into another financial phase," the finance ministry said of the outlook for 2012 when Greece should record for the first time a primary surplus of 3.2 billion euros.
"The additional measures that have been decided and announced for 2011 and 2012 amount to 6.6 billion euros," the finance ministry said in a statement.
Following its consultations with EU and IMF auditors, the government also unveiled a plan to shrink the bureaucracy by placing 30,000 civil servants temporarily in a "labour reserve".
Greek civil servants' jobs are protected by the constitution, but the government overcame the obstacle by placing in reserve those workers close to retirement and scrapping various state organisations and putting their employees in reserve.
Greece estimates it will save 300 million euros in 2012 by implementing this measure.
"The proposal in its final form is the mildest possible version as to the social impact it has," government spokesman Ilias Mosialos said in a statement.
Finance Minister Evangelos Venizelos has said the government had developed the scheme effectively laying off state workers with "transparent and objective" criteria.
"It creates the lowest possible social cost and places on a 'reserve' those who in comparison can more likely cope with the difficulties of this new situation," Venizelos said in an interview with the Sunday edition of newspaper "To Vima".
Antonis Samaras, the leader of Greece's main opposition New Democracy party, complained however that the government had rejected a more efficient labour reserve plan that would cut the deficit more quickly.
source economictimes
The 17 countries that share the debt-challenged euro currency will meet in Luxembourg on Monday in an effort to reach an agreement on releasing the bailout tranche which has been blocked by auditors for the past month.
Divided eurozone ministers will seek to avert a Greek default, which could send stock markets into a panic, deal an unprecedented blow to the European currency and bring the world back to the brink of a fresh financial crisis.
British Prime Minister David Cameron warned Sunday the eurozone must act decisively as it was posing "a threat to the worldwide economy," he told BBC television.
After a extraordinary cabinet meeting late Sunday, the Greek government announced that its budget deficit should drop to 8.5 per cent of gross domestic product in 2011 from 10.5 per cent last year, and in 2012 to 6.8 per cent of GDP.
Both deficit targets hover above the initial forecasts fixed in June of 7.4 per cent of GDP in 2011 and 6.5 per cent in 2012, the latter blamed on a deeper recession.
"This marks the country's entry into another financial phase," the finance ministry said of the outlook for 2012 when Greece should record for the first time a primary surplus of 3.2 billion euros.
"The additional measures that have been decided and announced for 2011 and 2012 amount to 6.6 billion euros," the finance ministry said in a statement.
Following its consultations with EU and IMF auditors, the government also unveiled a plan to shrink the bureaucracy by placing 30,000 civil servants temporarily in a "labour reserve".
Greek civil servants' jobs are protected by the constitution, but the government overcame the obstacle by placing in reserve those workers close to retirement and scrapping various state organisations and putting their employees in reserve.
Greece estimates it will save 300 million euros in 2012 by implementing this measure.
"The proposal in its final form is the mildest possible version as to the social impact it has," government spokesman Ilias Mosialos said in a statement.
Finance Minister Evangelos Venizelos has said the government had developed the scheme effectively laying off state workers with "transparent and objective" criteria.
"It creates the lowest possible social cost and places on a 'reserve' those who in comparison can more likely cope with the difficulties of this new situation," Venizelos said in an interview with the Sunday edition of newspaper "To Vima".
Antonis Samaras, the leader of Greece's main opposition New Democracy party, complained however that the government had rejected a more efficient labour reserve plan that would cut the deficit more quickly.
source economictimes
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