Greek budget deficit halves in 2010

Almost. The Budget Deficit fell for the first six months of this year, and is running at €11,450 million. This is almost half the €19,685 million deficit for the equivalent period last year. Finfacts report that the economy is expected to (only) contract 4% this year (despite massive austerity measures).

Finance Minister George Papaconstantinou said the country had “met its goal” for the first six months of 2010 after the 41.8% dip in the budget deficit – – to 4.9% of GDP (gross domestic product). He also said that the recession could be less serious than originally feared.

The Greek government has agreed to cut the public deficit to 8.1% of GDP this year.

The economy was expected to contract by 4% this year, when the EU/IMF deal was agreed.

Papaconstantinou said on Monday, the shrinkage may be 3%.

Government revenues continue to be lower than target, mainly due to low collection of VAT and other taxes in the face of a slowing economy. It would be worse absent a determined effort to cut tax evasion.

Papaconstantinou said in an interview with Greek daily Mafteboriki, that certain products would be taken out of the low 11% VAT category and be put into the basic VAT category, which carries a rate of 23%.

Another general strike is set for Thursday as parliament debates pension reform, which provides for raising the general retirement age from 61 to 65 years – – public servants usually retire in their 50’s.

It would appear they are having rather more success than Ireland, where the continuing fall out of the bursting of a massive credit bubble and subsequent banking collapse hampers efforts to rebalance the economy.