Greece Promises Spending Cuts To Curb Deficit

DEREK GATOPOULOS

ATHENS, Greece (AP) — Greece's new Socialist government on Thursday promised to cut public spending in 2010 to reduce the country's soaring budget deficit, currently more than four times the limit set for countries using the euro.

Finance Minister Giorgos Papaconstantinou said the country's economic output would shrink by 1.5 percent this year and shrink by 0.3 percent in 2010 — confirming that the country is in recession for the first time since 1993.

The 2009 budget deficit was expected to reach 12.7 percent of gross domestic product and would be reduced to 9.4 percent next year, helped by public spending cuts worth euro1.6 billion ($2.4 billion), Papaconstantinou said.

The figures were presented in the draft 2010 budget, due to be approved by parliament before the end of the year.

Prime Minister George Papandreou's Socialists ousted the conservatives in general elections last month and sharply revised deficit figures. The revision drew strong public criticism from EU finance officials, because countries that use the euro are committed to keeping their budget deficits below 3 percent of GDP.