The plan, which is more ambitious than past projections, was discussed with EU and IMF officials in an inspection visit during which Greek officials say they have secured the next tranche of aid from a 110-billion-euro EU/IMF bailout.
"The main target is that the deficit should be reduced to about three billion euros in 2015 from about 17 billion," said the official, who attended the meeting where Finance Minister George Papaconstantinou presented the 2012-2015 plan.
When it agreed the bailout in May last year, the IMF forecast that the deficit would amount to about 2 percent of gross domestic product in 2015. That would mean above four billion euros if calculated based on forecasts for 2011 GDP, or more if the economy returns to growth as planned in 2012.
"The deficit will be reduced by two-thirds from spending cuts," the official said. "The programme does not include additional cuts in salaries and pensions and no tax hikes," he said, adding that Greece was eyeing revenues from real estate assets and would have to close some public organisations.
If the Greek economy stayed at current levels of about 230 billion euros, the government's new target would mean that the deficit would stand at 1.3 percent of GDP in 2015. It would be even less if growth forecasts are confirmed.
The Socialist government has already cut public sector wages, frozen pensions, raised taxes and started reforms to open up its economy to more competition, as agreed with the EU and the IMF last year in return for the bailout.
EU/IMF INSPECTION
The EU and IMF inspectors have been in Athens since Monday to assess whether Greece has met fourth-quarter fiscal consolidation targets under the bailout plan, and are expected to say on Friday if they are giving the green light for the fourth, 15-billion-euro, aid tranche. For more see [ID:nLDE71825Q].
Deputy Finance Minister Philippos Sachinidis told Skai radio that the inspectors were satisfied with the progress.
By Lefteris Papadimas and Ingrid Melander
source: Reuters
