Greece to change laws in order to reduce the budget deficit

Greek authorities are going in the near term to change the tax laws and laws governing the payment of wages, the program aimed at reducing the budget deficit of the country. On this today, Prime Minister of Greece George Papandreou during his visit to India Delhi, RBC reports.

“I understand that our economic policies can lead to distrust, so we have to prove its effectiveness. We clearly show the effectiveness of this program,” - said the Greek prime minister, reports Reuters.

details of prospective legislative reforms Papandreou did not disclose. It also noted that at present Greece masters funds allocated to it the EU to reduce the budget deficit and stimulate the economy.

the eve of the Minister of Finance of Greece Georgios PAPACONSTANTINOU said that Greece is not going to raise income tax now stands at 40%, or change the scheme of taxation of bank deposits to get incremental revenue. However, before the Greek government announced increased taxes on fuel.

PAPACONSTANTINOU also promised that the amount of subsidy in the public sector will be increased only at the level of the official forecast for inflation.

recall that on 3 February the European Commission (EC) endorsed the plan of the Greek Government to reduce public debt and bring the country”s budget to the relative balance. However, by adopting the so-called Stability Programme of Greece, Brussels warned that Athens may need additional measures to reduce costs and, consequently, an increase of budget revenues, including through new taxes.

In addition, the EC noted that the budget statistics Greece still does not cause complete confidence. “Given the fact that Greece has failed to fulfill its responsibility to provide a reliable fiscal statistics, the commission will prescribe the Greek government to take all necessary steps to continue to ensure the provision of reliable information about the state of public finances”, - stated in the EC.

Greece intends to reduce the budget deficit below 3% of GDP in 2012. that would be consistent with the so-called the Maastricht criteria. January 15 the Greek government to the European Commission presented a program of stabilization of public finances for the period 2010-2013.

This plan provides for the gradual reduction of fiscal deficit - up 8.7% of GDP this year, up to 5,6% - in 2011., up to 2,8% - in 2012. and, finally, to 2% - in 2013. In 2009. this figure was 12,7% of GDP.

Currently, Greece is an obvious “weak link” in the euro area: its fiscal problems applying pressure on financial markets and fears of possible default of the country. EU officials have repeatedly tried to reassure markets, saying that Greece”s default is not threatened, but the tension around the financial situation of the country persists. The country is experiencing the worst economic crisis since joining the euro zone in 2001.