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Commission endorses Greek plans Commission endorses Greek plans
(40 minutes later)
The European Commission has confirmed its endorsement of the Greek government's plans for balancing the country's finances. The European Commission has confirmed its support of the Greek government's plans for balancing the country's finances.
But EU economic commissioner Joaquín Almunia also launched an infringement procedure to ensure Greek authorities report reliable budgetary statistics.But EU economic commissioner Joaquín Almunia also launched an infringement procedure to ensure Greek authorities report reliable budgetary statistics.
He also welcomed the additional fiscal measures taken by Greece to try to reduce its budget deficit.He also welcomed the additional fiscal measures taken by Greece to try to reduce its budget deficit.
Greece's deficit is more than four times higher than eurozone rules allow.Greece's deficit is more than four times higher than eurozone rules allow.
In a televised address on Tuesday, Prime Minister George Papandreou urged the public to support his programme of tough austerity measures, which includes increases on fuel duty and a public sector pay freeze.In a televised address on Tuesday, Prime Minister George Papandreou urged the public to support his programme of tough austerity measures, which includes increases on fuel duty and a public sector pay freeze.
However, public sector workers are planning a strike next week.However, public sector workers are planning a strike next week.
Progress reviews
Mr Almunia said: "We consider that the programme is ambitious, and that the programme in terms of targets is achievable.
"We are endorsing the Greek programme. But at the same time we know that the implementation of the programme is not easy. It is difficult. This deserves support."
Austerity will be a hard sell - many on the left will fight cuts and wage freezes Gavin HewittBBC Europe editor Read more in Gavin's blog
However, Mr Almunia acknowledged that tackling the debt was difficult politically and complex technically.
He said that EU officials would monitor carefully the efforts of the Greek programme and would demand extra action if it was not on track to meet the deficit goals.
EU economic ministers will next meet on 16 February. Provided they accept the commission's recommendations, new deadlines will be set for Greece to review progress with officials.
It will have to submit a first report on 16 March, with a second deadline on 16 May.
Nigel Cassidy, the BBC's Europe business reporter, said the reliability of Greece's budgetary statistics was a long-standing issue.
"This was the problem before. Everybody here in Brussels knew Greece was not being very honest with its economic figures but nobody did anything about it," he said.
Fear of contagionFear of contagion
Greece is struggling with its worst economic crisis since joining the euro in 2001.Greece is struggling with its worst economic crisis since joining the euro in 2001.
It has one of the smaller economies in the European Union, but it is being watched closely because of the doubts financial markets have in it.It has one of the smaller economies in the European Union, but it is being watched closely because of the doubts financial markets have in it.
The envisaged correction of the deficit is feasible but subject to risks Jose Manuel BarrosoEuropean Commission President
Its long-term deficit cutting plan aims to reduce the budget shortfall, currently 12.7%, to less than 3% by 2012, but many people in Brussels and beyond remain sceptical.Its long-term deficit cutting plan aims to reduce the budget shortfall, currently 12.7%, to less than 3% by 2012, but many people in Brussels and beyond remain sceptical.
There are other bigger economies in the eurozone that face the same deficit problems and the fear of contagion is high, says the BBC's Johnny Dymond. There are other bigger economies in the eurozone that face the same deficit problems and the fear of contagion is high.
Misreporting
Austerity will be a hard sell - many on the left will fight cuts and wage freezes Gavin HewittBBC Europe editor Read more in Gavin's blog
On Tuesday, European Commission President Jose Manuel Barroso said the size of Greece's deficit in 2009 came as "a surprise to us all".
"Such deficit results from a combination of budgetary slippage with statistical misreporting. A deficit of such a magnitude must be decisively corrected," he said.
"The envisaged correction of the deficit is feasible but subject to risks. Provided such risks will not be allowed to materialise through the timely implementation of corrective measures the deficit will indeed be corrected.
"We believe this will be done. The Greek government is committed to take such measures."
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