Report: Greece budget breather to spur economic recovery

August 18, 2012 12:29

ATHENS - Finance ministry officials in Greece have calculated that the debt-stricken country's economy will recover faster and its debt be more sustainable if it is given two more years to reduce its budget deficit, a Greek newspaper reported on Saturday.

The estimate chimes with the view of Greek Prime Minister Antonis Samaras who has tried, unsuccessfully, to win such an extension in the past and is expected to refloat the proposal next week with the leaders of France and Germany as well as with Jean-Claude Juncker, the Eurogroup chief.

Under the terms of its European Union/International Monetary Fund bailout, Greece is bound to implement painful austerity measures to bring its budget deficit below 3 percent of GDP by the end of 2014, from an expected 9.3 percent of GDP this year.

But with the country in its fifth consecutive year of recession and social and political discontent rising, Samaras is keen to soften the impact of budget cuts on society by extending the deadline international lenders set it.

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